Eastern District of New York

Earlier today, at the United States District Court in Central Islip, New York, the Hon. Denis R. Hurley sentenced Diane Kaylor, a former broker and bookkeeper of Agape World, Inc. (Agape), to 78 months’ imprisonment and ordered that she pay approximately $179 million in restitution following her convictions on April 21, 2015, after a four-week jury trial, for securities fraud, conspiracy, mail fraud, and wire fraud.  These convictions arose out of the Kaylor’s participation in a Ponzi scheme, in which she took $3.6 million in commission payouts for herself, which she spent on home improvements, luxury automobiles, exotic vacations, and other items. 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and Philip R. Bartlett, Inspector-in-Charge, United States Postal Inspection Service (USPIS). 

“For more than three years, Diane Kaylor and her co-defendants sold lies to thousands of unsuspecting investors,” stated United States Attorney Capers.  “Victim investors have been saddled with huge debts, some lost their life’s savings, their retirements have been delayed, and their children have been saddled with unforeseen student loan payments.  Kaylor has now been held to account for her role in these crimes.”  Mr. Capers expressed his grateful appreciation to the FBI and USPIS, the agencies that led the government’s investigation, and thanked the United States Securities and Exchange Commission for its assistance in the case.

Nicholas Cosmo founded Agape in August 2000, following 21 months in a federal prison for defrauding investors.  Between October 2005 and January 2009, Kaylor played a critical role in the scheme, soliciting and obtaining tens of millions of dollars from investors.  To induce investments and discourage withdrawals, she misled investors by assuring them that their money would only be used to fund specific, short-term secured bridge loans to commercial borrowers, or to make short-term loans to small businesses, promising to pay investors unusually high rates of returns and representing that investing in Agape carried little or no risk of loss.  As a result of these inducements, Kaylor actually raised significantly more money than was needed for the loans, and for her efforts she made approximately $3.6 million.

Kaylor and her co-conspirators paid returns to Agape investors, not from any profits earned on investments, but rather from existing investors’ deposits or money paid by new investors.  They then took more than $370 million – approximately $55 million of which came from investors that Kaylor or her sub-brokers convinced to invest in the Ponzi scheme – from approximately 5,000 investors.  Of that $370 million, only $22 million actually went to fund bridge loans.  Approximately $113 million of investors’ money was used to trade high risk futures and commodities, over $80 million of which was lost in these markets. 

As the fraudulent scheme began to unravel, Kaylor continued to deceive investors about Agape’s financial health.  On November 3, 2008, Kaylor learned that all of Agape’s 2007 bridge loans were in default or on extension, but did not disclose this information to existing or new investors.  Instead, she continued to solicit money from investors.  Ultimately, approximately 3,800 investors sustained actual losses totaling more than $150 million.

On October 14, 2011, Cosmo, following his guilty plea, was sentenced to a term of imprisonment of 25 years for his role in the scheme; on February 24, 2016, following his convictions after the same four-week jury trial as Kaylor, Jason Keryc, a broker at Agape, was sentenced to a term of imprisonment of nine years for his role in the scheme; and on April 22, 2016, following his guilty plea, Anthony Ciccone, who was also a broker at Agape, was sentenced to a term of imprisonment of seven years for his role in the scheme.  In addition to the convictions of Cosmo, Kaylor, Keryc, and Ciccone, the government’s investigation led to the conviction of five other defendants in the scheme, who are awaiting sentencing before Judge Hurley.

The government’s case is being handled by the Office’s Long Island Criminal and Civil Sections.  Assistant United States Attorneys Christopher C. Caffarone, Bradley T. King, Grace M. Cucchissi, and Vincent Lipari are in charge of the prosecution.

The Defendant:

DIANE KAYLOR
Age: 40
Bethpage, New York

E.D.N.Y. Docket No. 12-CR-357 (S-4)(DRH)

Earlier today, Alberto Randazzo, a Sergeant with the New York City Police Department (NYPD), pleaded guilty to two counts of conspiracy to sexually exploit a child and one count of receipt of child pornography.  Today’s plea took place before United States District Judge Pamela K. Chen at the federal courthouse in Brooklyn, New York.  At sentencing, Randazzo faces a mandatory minimum sentence of 15 years and a maximum of 30 years in prison on each of the top counts.

The plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI), New York, and William J. Bratton, Commissioner, New York City Police Department (NYPD).

According to previous court filings and statements made during the plea proceedings, from as early as 2010 through 2013, Randazzo targeted mothers through websites such as Ashley Madison and Match.com and persuaded them to sexually abuse their children so he could view it.  Randazzo was caught in February 2013, when a witness found disturbing text messages on Randazzo’s phone and uncovered emails from women sending Randazzo pictures of them molesting their children.  When the witness confronted him, Randazzo admitted his sexual interest in mothers having sex with their children.

Based on the information obtained from the witness and the photographs, the Internal Affairs Bureau (IAB) of the NYPD obtained a search warrant for Randazzo’s apartment and found numerous images and videos of child pornography, including a number of videos of child pornography that were created by Randazzo himself.  Randazzo was arrested and charged in Queens Criminal Court.  At the time of his arrest, Randazzo had been a member of the NYPD for 15 years.  While on bail in connection with that case, Randazzo was discovered by Special Agents of HSI to be downloading child pornography, which led to the federal investigation and federal charges being filed. 

In announcing the guilty plea, Mr. Capers praised the joint investigative efforts of HSI and the NYPD.

The government’s case is being prosecuted by Assistant United States Attorneys Tyler Smith and Moira Kim Penza. 

The Defendant:

ALBERTO RANDAZZO
Age:  39
Astoria, New York

E.D.N.Y. Docket No. 14-CR-189 (PKC)

A five-count indictment was unsealed today in United States District Court for the Eastern District of New York charging Frank Smith, a member of a Coney Island-based gang known variously as “Rival Impact,” “R.I.,” “Mermaids,” “Mermaid Boys,” and “33rd Street Crew,” with crimes including racketeering, murder in aid of racketeering, narcotics trafficking and unlawful use of firearms.  The defendant was arraigned this afternoon before United States Magistrate Judge Lois Bloom at the federal courthouse in Brooklyn. 

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and William J. Bratton, Commissioner, New York City Police Department (NYPD).

As detailed in the indictment, between January 2001 and October 2014, to maintain Rival Impact’s power and hold in the Coney Island section of Brooklyn, the defendant and his gang engaged in widespread narcotics distribution and violence, including the October 4, 2010 murders of Terrance Serrano and Rashawn Washington, in addition to various attempted murders, robberies, assaults and intimidation.  Serrano and Washington, who were members of a rival gang known as “Thirty-O,” were shot and killed while sitting in their car after leaving a nightclub in Manhattan.

“As alleged, for years the defendant and other members of this violent Brooklyn street gang have plagued neighborhoods throughout Coney Island and elsewhere with drugs and violence.  Today’s charges send the clear message that violence by and among street gangs will not be tolerated.  We will use all available resources to hold accountable those who endanger the lives and well-being of the residents of our communities,” stated United States Attorney Capers. 

“Street gangs have an impact on the communities in which they operate.  They spread fear and violence so they can control their so called turf; and for them murder just comes with the territory.  But the FBI and our law enforcement partners won’t accept any crime as a new normal, and we won’t stop pursuing gang members,” said FBI Assistant Director-in-Charge Rodriguez.

“We are hopeful that today’s indictment is a milestone along the path to this individual’s conviction,” said NYPD Commissioner Bratton.  “The defendant, as alleged, terrorized Coney Island and other parts of the City by selling illegal narcotics, murdering members of a rival gang and using violence and intimidation to achieve his criminal objectives.”  

The charges are merely allegations, and the defendant is presumed innocent unless and until proven guilty.  If convicted of the charges in the indictment, Smith faces a maximum sentence of life imprisonment.

The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorney Maria Cruz Melendez is in charge of the prosecution.

The Defendant:

FRANK SMITH
Age:  31
Staten Island, New York

EDNY Docket No. 16-CR-346

Earlier today, Fowzi Naji Tareb pled guilty at the federal courthouse in Brooklyn, New York, to defrauding the United States Department of Agriculture in connection with its Supplemental Nutrition Assistance Program (SNAP), previously known as the Food Stamp Program.  Tareb was arrested after providing numerous retail businesses in the New York area with the machinery to accept SNAP benefits even though they were not authorized to do so.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and William Squires, Special Agent-in-Charge, Northeastern Region, United States Department of Agriculture, Office of Inspector General.

The federal government, through the United States Department of Agriculture, Food and Nutrition Service (FNS), administers the SNAP program.  SNAP utilizes federal tax dollars to subsidize low income households, affording such households the opportunity to achieve a more nutritious diet by increasing their food purchasing ability.

In New York, individuals who receive SNAP benefits no longer redeem their benefits by using paper food stamp coupons, but rather redeem them electronically through the use of an Electronic Benefits Transfer (EBT) card, which operates much like ATM cards.  The EBT cards may be used by recipients to purchase eligible food items at retail food stores that are authorized by FNS to participate in SNAP and have EBT terminals located in the stores.  As a purchase is made, the retailer runs the EBT card through the terminal, and the amount of the purchase is deducted from the recipient’s card.  The purchase amount is then electronically credited to the retail food store owner’s bank account.

SNAP benefits may be accepted by authorized retailers only in exchange for eligible food items.  Items such as beer, cigarettes, paper goods, and soaps are not eligible for purchase.  SNAP benefits may not lawfully be exchanged for cash under any circumstances and may not lawfully be used to pay off credit accounts.  SNAP benefits may be accepted only by retailers authorized to participate in SNAP by FNS. 

Tareb used his position as an agent at Century Payments, a third-party vendor and distributor of EBT terminals, to provide EBT terminals capable of processing SNAP benefits and authorization codes to more than 25 retailers that were not authorized by FNS to accept SNAP benefits.  In doing so, Tareb facilitated more than $6 million in unauthorized SNAP transactions and enabled the unlawful exchange of SNAP benefits for cash.

In announcing the guilty plea, Mr. Capers extended his grateful appreciation to the United States Department of Agriculture, Office of Inspector General.  

Today’s guilty plea proceeding was held before United States Magistrate Judge Steven M. Gold.  When sentenced, Tareb faces up to 20 years in prison, as well as forfeiture and a fine.

The government’s case is being prosecuted by Assistant United States Attorney Saritha Komatireddy.

The Defendant:

FOWZI NAJI TAREB
Age: 43
Brooklyn, New York

E.D.N.Y. Docket No. 15-CR-038

A ten-count indictment was unsealed today in United States District Court for the Eastern District of New York charging eight defendants with conspiring to make false statements in the acquisition of firearms and/or with related firearm acquisitions or trafficking offenses.  One of the defendants, Curtis Clark, was also charged as being a felon in possession of a firearm. 

Clark was previously arraigned before Magistrate Judge Viktor V. Pohorelsky in Brooklyn on June 15, 2016.  Four of the remaining defendants were arrested earlier today in South Carolina, and their initial appearances are scheduled this afternoon before United States Magistrate Judge Kaymani D. West at the federal courthouse in Florence, South Carolina.  The government will seek to remove to New York for prosecution the defendants arrested out of state.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Delano A. Reid, Special Agent-in-Charge, Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF), and William J. Bratton, Commissioner, New York City Police Department (NYPD).

“This office is committed to preventing the flow of illegal firearms up the Interstate 95 corridor, also referred to as the ‘Iron Pipeline,’ into New York,” stated United States Attorney Capers.  “Today’s arrests are another example of our resolve to prosecute those who illegally traffic firearms, as well as the straw buyers who enable the traffickers to engage in this potentially deadly and illegal business.”

“As alleged in the indictment and complaint, Curtis Clark thought that he could supply firearms along the Iron Pipeline to the streets of New York City.  His co-conspirators acted as straw purchasers, buying firearms on Clark’s behalf from dealers in South Carolina and falsifying the required Federal forms in order to make it appear that they were the actual purchasers.  This ensured that if any of the firearms were recovered in crime scenes, they could not be traced directly back to Clark.  As a result of the investigation by the ATF Joint Firearms Task Force, Clark and his co-conspirators will now face the consequences of the charged crimes.  Today’s indictment carries two messages: To those who would traffic the instruments of violent crime, we are watching and you will be caught.  To those that think straw purchasing firearms is a victimless crime, your actions can have severe consequences, both to you, and to the community where those firearms eventually wind up.  We’d like to extend our gratitude to the NYPD and the U.S. Attorney’s Office for their efforts and commitment during this investigation,” stated ATF Special Agent-in-Charge Reid.   

As alleged in the indictment and in a complaint previously unsealed against Clark, his co-defendants Jonathan Grant, Shamika Cross, Alexis Gilbert, Ganika McCollum, Alexis Morris, Ashley Sowells, and Angel Wheeler agreed to purchase firearms for him at firearms stores in South Carolina, falsely claiming that they were purchasing the guns for themselves.  Clark and others then illegally transported the guns to New York for sale in Brooklyn.  On May 28, 2014, Clark was stopped in a vehicle in Brooklyn, and nine firearms were seized, including six Glock semi-automatic pistols.  ATF agents then began the investigation into the source of the seized firearms, including reviewing the federal forms required to be completed when a firearm is purchased from a licensed firearm dealer, interviewing personnel at the gun stores involved in the sales, and interviewing the individuals who had purchased the firearms seized from Clark’s vehicle.  The investigation established that the seized firearms had been purchased for Clark by Cross, Gilbert, McCollum, Morris, Sowells, and Wheeler at firearms stores in and around Marion, South Carolina, in April and May 2014.

On January 1, 2016, Clark, a previously convicted felon, was arrested in Marion, South Carolina, in possession of a loaded Smith & Wesson .38 caliber pistol. 

The charges in the indictment and complaint are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by Assistant United States Attorneys Mark E. Bini and Nomi D. Berenson.

The Defendants:

CURTIS CLARK
Age:  21
Marion, South Carolina

Jonathan Grant
Age:  21
Marion, South Carolina

Shamika Cross
Age:  25
Marion, South Carolina

Alexis Gilbert
Age:  24
Atlanta, Georgia

Ganika McCollum
Age:  25
Dillon, South Carolina

Alexis Morris
Age:  34
Marion, South Carolina

Ashley Sowells
Age:  25
Marion, South Carolina

Angel Wheeler
Age:  23
Marion, South Carolina

E.D.N.Y. Docket No. 16-CR-315

Earlier today, Darren Goodrich, a registered broker at a brokerage firm in El Segundo, California, pleaded guilty to conspiracy to commit securities fraud for manipulating the stock of Cubed, Inc. (Cubed), which traded under the ticker symbol CRPT.  The guilty plea was entered before United States Magistrate Judge Vera M. Scanlon at the federal courthouse in Brooklyn, New York.  When sentenced, Goodrich faces up to five years in prison, as well as restitution, criminal forfeiture, and a fine.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office.

According to court filings and facts presented at the plea hearing, between March 2014 and July 2014, Goodrich and his co-conspirators engaged in a scheme to defraud investors and potential investors in Cubed by artificially controlling the price and volume of traded shares in the company through fraudulent concealment of the defendants’ and their co-conspirators’ ownership interests and engineering price movements and trading volume in the stock.  In March 2014, Goodrich’s co-conspirators took Cubed public through an asset purchase agreement.  On April 22, 2014, Cubed’s stock began trading in earnest.  Between April 22, 2014 and April 30, 2014, Goodrich and his co-conspirators concocted trading volume in this stock by purchasing more than 50% of the total number of Cubed shares purchased during this period.

Between May 2, 2014 and June 29, 2014, law enforcement authorities conducted a judicially-authorized wiretap of one of Goodrich’s co-conspirator’s cellular telephone.  The wiretap revealed that Goodrich and his co-conspirators fraudulently manipulated Cubed’s stock by artificially controlling the price and volume of that stock through orchestrated trading.  Rather than generating significant market interest and causing a quick pump and dump that would elicit regulators’ scrutiny, the conspirators gradually increased the price of Cubed’s stock to give it the appearance of a legitimate company with genuine and steady market demand for the security.  For example, on May 5, 2014, while Cubed was in a period of gradual increase from $5.20 on April 22, 2014 to $5.42 on May 22, 2014, a co-conspirator called Goodrich, and stated, “Can you buy a 100 and see if [the other market maker] moves?”  Goodrich complied and then responded, “Yeah, they’re going.”

Goodrich and his co-conspirators used an attorney escrow account to successfully control the price and volume of Cubed’s stock.  On June 23, 2014, Cubed reached its highest closing price of $6.75 per share, resulting in a market capitalization of approximately $200 million.  Previously, Cubed filed with the SEC a Form 10-Q and reported less than $1,500 in cash, zero revenue, negative stockholders’ equity, a net loss of $15,000, and accrued professional fees of $131,824.

*          *          *

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Shannon C. Jones, Christopher L. Nasson, and Patrick Hein are in charge of the prosecution, with assistance provided by Assistant United States Attorney Claire S. Kedeshian of the Office’s Civil Division, which is responsible for the forfeiture of assets.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit ww.StopFraud.gov.

The Defendant:

DARREN GOODRICH
Age:  37
Residence: Manhattan Beach, California

E.D.N.Y. Docket No. 14-CR-399 (S-1) (ENV)

Earlier today in Central Islip, NY, Bradley Bender, former Southampton Town Councilman, was sentenced to 24 months’ imprisonment, three years supervised release and $5,000 forfeiture, following his guilty plea on November 24, 2015, to conspiring to illegally distribute oxycodone.  The sentencing proceedings were held before U.S. District Judge Arthur D. Spatt. 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.

In announcing the sentence, United States Attorney Robert L. Capers stated, “Today’s sentence is a reminder to all those entrusted to represent the interests of the public that they will be held accountable if they engage in criminal activity and violate that trust.”  Mr. Capers expressed his grateful appreciation to the DEA’s Long Island Tactical Diversion Squad, which led the government’s investigation in this case.       

According to court filings and statements made in court at the time he entered the guilty plea, between July 2012 and June 2015, Bender received phony prescriptions for oxycodone from a Riverhead physician assistant, Michael Troyan.  Bender filled those prescriptions and illegally exchanged the oxycodone pills for cash and steroids with another co-conspirator.  The oxycodone pills were then re-sold to drug abusers. 

Troyan was arrested on November 4, 2015, and pleaded guilty last Friday, June 17, 2016, before United States District Judge Denis R. Hurley, to conspiring to illegally distribute oxycodone.  Troyan is scheduled to be sentenced on Septembeer 30, 2016.

Bender’s resignation as a Councilman was accepted by the Southampton Town Board on the day of his guilty plea.

This case is part of a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative.  In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Center for Disease Control and Prevention has called an epidemic increase in the abuse of so-called opioid analgesics.  To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 19 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, health clinic, and pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

The government’s case was prosecuted by Assistant United States Attorney Allen L. Bode. 

The Defendant:

Name: BRADLEY BENDER
Age: 55
Residence: Northampton, New York

E.D.N.Y. Docket No. 15-CR-593(ADS)

Charged Offenses Include Sex Trafficking, Interstate Prostitution, Alien Smuggling, Money Laundering, Racketeering and Racketeering Conspiracy in Connection with Scheme to Compel Mexican Women and Girls into Prostitution in the United States 

Five defendants were arraigned in federal court today following their extradition from Mexico on charges of sex trafficking and related violations as the latest development resulting from coordinated bilateral human trafficking enforcement efforts.

Attorney General Loretta E. Lynch, Director Sarah R. Saldaña of U.S. Immigration and Customs Enforcement (ICE); Principal Deputy Assistant Attorney General Vanita Gupta, head of the Justice Department’s Civil Rights Division, and U.S. Attorney Robert L. Capers of the Eastern District of New York made the announcement.

Jovan Rendon-Reyes, aka Jovani, 32; Guillermina Rendon-Reyes, 44; Jose Rendon-Garcia, aka Gusano, 32; Felix Rojas, 45; and Severiano Martinez-Rojas, 50, were arraigned before U.S. Magistrate Judge James Orenstein of the Eastern District of New York on a 27-count indictment following their extradition from Mexico.  The indictment, which was unsealed on Nov. 19, 2015, charges eight defendants with racketeering and racketeering conspiracy involving predicate acts of sex trafficking by force, fraud and coercion; sex trafficking of minors; interstate prostitution; alien smuggling; money laundering and related offenses.  Three co-defendants charged in the same indictment, Saul Rendon-Reyes, aka Satanico, 37; Francisco Rendon-Reyes, aka Pancho, 27; and Odilon Martinez-Rojas, aka Chino and Saul, 44, were arraigned in the Eastern District of New York on Nov. 19, 2015.

“Human trafficking is a heinous crime that preys upon the most vulnerable members of our society,” said Attorney General Lynch.  “Today, as part of the Department of Justice’s ongoing efforts to end this appalling practice, we are proud to announce the extradition of five Mexican traffickers who smuggled women and girls into the United States as sex slaves.  Our action would not be possible without the close cooperation of our partners in Mexican law enforcement, and I want to thank them for their ongoing commitment to working together to uphold the rule of law in both of our countries.  Going forward, we will continue to stand with Mexico – and with all of our international partners – to end human trafficking and to bring all those who facilitate this crime to justice.”

“These five extraditions speak to the strong bilateral relationship and commitment between the United States and Mexico to holding those alleged to have engaged in the ruthless act of human trafficking accountable,” said Director Saldaña.  “ICE Homeland Security Investigations (HSI) will continue leveraging all of its investigative capabilities to disrupt human trafficking syndicates no matter where in the world they operate.”

“Vindicating the rights of vulnerable individuals is among the highest priorities of the Department of Justice and the Civil Rights Division,” said Principal Deputy Assistant Attorney General Gupta.  “The defendants are charged with operating a scheme across international borders to exploit young women and girls by prostituting them for the benefit of the defendants.  We will work tirelessly to pursue justice for those held in modern-day slavery.”

“The extradition of these five defendants is an important step in our effort to bring some sense of closure to the victims of this terrible crime, and a testament to our resolve to end human trafficking,” said U.S. Attorney Capers.  “Our commitment to prosecute sex traffickers and those who would enslave others is unwavering.  We would like to extend our deep gratitude to the government of Mexico and our law enforcement partners who made it possible to bring these defendants to the United States so that we may seek justice for their victims.”

The indictment alleges that the defendants were members of an international criminal organization, identified in the indictment as the Rendon-Reyes Trafficking Organization, which engaged in sex trafficking and related criminal activity between December 2004 and June 2014 in Queens, New York; Atlanta; and Jemison, Alabama, among other locations.  According to the allegations in the indictment, the defendants used force, threats of force, fraud and coercion to cause young women and girls from Mexico and Latin America to engage in prostitution in the United States.

Since 2009, the Department of Justice and HSI have collaborated with Mexican law enforcement counterparts in a Bilateral Human Trafficking Enforcement Initiative aimed at strengthening high-impact prosecutions under both U.S. and Mexican law.  The initiative is aimed at dismantling human trafficking networks operating across the U.S.-Mexico border, bringing human traffickers to justice, reuniting victims with their children and restoring the rights and dignity of human trafficking victims, held under the trafficking networks’ control.  These efforts have resulted in successful prosecutions in both Mexico and the United States, including U.S. federal prosecutions of more than 50 defendants in multiple cases in New York, Georgia, Florida and Texas since 2009, and numerous Mexican federal and state prosecutions of associated sex traffickers.  The extraditions in this case are the latest development in the Eastern District of New York’s comprehensive anti-trafficking program, which has to date indicted more than 65 defendants in sex trafficking cases and provided assistance to more than 130 victims, including 36 minors.  In addition, through the Eastern District of New York’s anti-trafficking program, 18 children have been reunited with their victim-mothers.

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

In announcing the extradition and arraignment, Attorney General Lynch, Director Saldaña, Principal Deputy Assistant Attorney General Gupta and U.S. Attorney Capers commended the HSI’s New York Office, the HSI Mexico Attaché Office, the Department of Justice’s Office of International Affairs, the State Department and the New York City Police Department for their assistance and praised the government of Mexico for its role in advancing bilateral anti-trafficking enforcement efforts. 

The case is being prosecuted by Assistant U.S. Attorneys Taryn A. Merkl and Margaret Lee of the Eastern District of New York and Deputy Director Benjamin Hawk of the Civil Rights Division’s Human Trafficking Prosecution Unit.

Rendon-Reyes et al Indictment

Earlier today, a federal grand jury sitting in Brooklyn returned an indictment charging Yolanda Vitulli, the executive director of a charity that provides services to individuals with developmental disabilities, with embezzling approximately $100,000 from the charity for her personal use. 

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI), and New York State Inspector General Catherine Leahy Scott.

As is alleged in the indictment, between January 2001 and May 2016, Vitulli served as the Executive Director of Tender Care Human Services Inc. (Tender Care), a not-for-profit social service provider based in Queens, New York, that provided services to individuals with autism and other development disabilities throughout the New York City metropolitan area.  Tender Care received approximately $3 million in federal and New York State Medicaid funding each year to provide the services.

The government’s investigation revealed that between 2009 and May 2014, Vitulli embezzled Tender Care funds to pay housekeepers to clean her residence, do laundry, and provide childcare.  Additionally, between January 2012 and November 2013, Vitulli used Tender Care funds to hire a contractor to perform work at her residence, including purchasing and installing a hot tub, fence, furniture, and security cameras.

“The embezzlement of public funds meant to benefit members of our communities most in need of assistance is a serious crime,” stated United States Attorney Capers.  “With this indictment, we serve notice that those who engage in such conduct will be vigorously investigated and prosecuted by this Office.”  Mr. Capers extended his grateful appreciation to the United States Department of Labor, Office of the Inspector General, for its assistance.

“The very definition of charity is to give to those in need.  Instead, the subject in this case decided the $100,000 she’s accused of stealing would be better spent making her life easier.  Theft is a crime, but to take from those who are in need of help makes this case more egregious,” stated FBI Assistant Director-in-Charge Rodriguez.”

“The defendant allegedly stole public funds meant for the developmentally disabled in order to subsidize her own life of luxury,” said New York State Inspector General Leahy Scott.  “This indictment should serve as warning to any officers and agents of charitable providers who exploit taxpayer funds intended for critical public services; they will be identified, apprehended, and prosecuted to the fullest extent of the law.  I will continue to work closely with my state and federal law enforcement partners to pursue and hold accountable anyone who attempts to defraud the public welfare system and the people it serves.”

The charge in the indictment is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted of embezzling public funds, the defendant faces a maximum sentence of ten years’ imprisonment.  

The government’s case is being prosecuted by Assistant United States Attorneys Robert Polemeni and Nathan Reilly.

The Defendant:

YOLANDA VITULLI
Age: 52
Mohnton, Pennsylvania

E.D.N.Y. Docket No. 16-CR-344

Late yesterday afternoon, following a one week trial, a federal jury in Brooklyn, New York, returned a guilty verdict against James Cureton for drug and firearm related murder and drug trafficking.  The charges arose out of the defendant’s participation in a murder that took place in Albany, New York.  When sentenced by United States District Carol B. Amon, the defendant faces a maximum sentence of up to life imprisonment and a mandatory minimum sentence of 20 years on the drug-related count of conviction.    

The verdict was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office; and William J. Bratton, Commissioner, New York City Police Department.

“This verdict sends the clear message that drug traffickers who use violence as a tool of their trade will be investigated, apprehended, and held fully accountable for their crimes,” stated United States Attorney Capers.  Mr. Capers thanked the Albany Police Department for its assistance in this case.

“The business of drug trafficking and criminal behavior doesn't often end with a healthy retirement in some sunny locale near a beach.  In this case, the defendant who chose a life of crime will most likely spend the rest of it in federal prison for murder.  The FBI Metro Safe Streets Task Force and our law enforcement partners will not stop going after criminals who make our communities dangerous for those people who choose to abide by the law,” stated FBI Assistant Director-in-Charge Rodriguez. 

“For drug traffickers who use violence and murder to further their trade: we will employ every tool to bring justice for your victims.  I thank the jury for their time in rendering this verdict,” stated New York Police Commissioner Bratton. 

On October 31, 2009, Cureton and a coconspirator killed Raymond Books because he had ceased making payments on a $37,000 drug debt.  Cureton drove with his coconspirator to Albany on the day of the murder and brought a spray bottle of cleaning solution to remove any traces of their presence at the crime scene.  Before arriving, Cureton also enlisted another individual to get Brooks’s girlfriend out of their Albany apartment, ensuring there would be no witnesses there.  Once inside the premises, the coconspirator shot and killed Brooks.  Cureton then drove them back to Staten Island. 

Later that night, Cureton reached out and began to intimidate potential witnesses who might be able to connect him to the murder.  Cureton also continued trafficking narcotics with the coconspirator and their associates for several years after the murder.

The government’s case is being prosecuted by the Office’s Organized Crime and Gangs, and International Narcotics and Money Laundering Sections.  Assistant United States Attorneys Alicyn Cooley and Jennifer Carapiet are in charge of the prosecution.

The Defendant:

JAMES CURETON
Age: 43
Staten Island, New York

E.D.N.Y. Docket No. 16-CR-23 (CBA)

Michael Troyan, a physician assistant who operated two urgent care clinics on the east end of Long Island, today pleaded guilty to conspiring to illegally distribute oxycodone, a highly addictive prescription pain medication.  The guilty plea was entered before United States District Judge Denis R. Hurley at the U.S. Courthouse in Central Islip.  When sentenced, Troyan faces a maximum sentence of 20 years’ imprisonment and a $1 million fine.

In announcing the guilty plea, United States Attorney Robert L. Capers expressed his grateful appreciation to the DEA’s Long Island Tactical Diversion Squad, which led the government’s investigation in this case.

According to court filings and statements made in court during the guilty plea, between November 2011 and October 2015, Troyan, who was authorized to prescribe controlled substances, issued prescriptions for thousands of oxycodone pills to co-conspirators for the purpose of illegally re-selling the pills.  During the investigation, Troyan was captured on video in an undercover operation writing phony prescriptions at his Riverhead medical office for oxycodone and receiving large quantities of cash – half the profit from prior illegal sales.  As part of his guilty plea, Troyan agreed to forfeit $710,290 attributable to illegal prescription sales.

One of Troyan’s co-conspirators was Southampton Town Councilman Bradley Bender, who is scheduled to be sentenced on June 24, 2016.  Bender’s resignation as a Councilman was accepted by the Southampton Town Board on the day of his guilty plea, November 24, 2015.

This case is part of a series of federal prosecutions by the United States Attorney’s Office as part of the Prescription Drug Initiative.  In January 2012, this Office and the DEA, in conjunction with the five District Attorneys in the Eastern District of New York, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state, and local government partners, launched the Initiative to mount a comprehensive response to what the United States Department of Health and Human Services Center for Disease Control and Prevention has called an epidemic increase in the abuse of opioid analgesics. To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 18 health care professionals, taken civil enforcement actions against a hospital, a pharmacy, and a pharmacy chain, removed prescription authority from numerous rogue doctors, and expanded information-sharing among enforcement agencies to better target and pursue drug traffickers.  The Initiative also is involved in an extensive community outreach program to address the abuse of pharmaceuticals.

The government’s case is being prosecuted by Assistant United States Attorneys Allen Bode and James Knapp.

The Defendant:

Name: MICHAEL TROYAN
Age: 37
Residence: Riverhead, New York

Nelson Nolasco was sentenced today to 420 months in prison by United States District Judge I. Leo Glasser at the federal courthouse in Brooklyn.  In the middle of his jury trial held in November 2011, Nolasco pleaded guilty to robbery conspiracy, cocaine trafficking conspiracy, and firearm charges.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), New York Division.

Nolasco is the last of 25 defendants to be sentenced in this prosecution of a violent robbery crew that targeted drug traffickers.  During some of these robberies, members of the robbery crew posed as law enforcement officers, staged fake arrests of narcotics traffickers, and then forcibly seized the traffickers’ drugs and drug proceeds.  Members of the robbery crew often restrained their victims with handcuffs, rope, or duct tape.  The crew members often brandished firearms and physically assaulted victims.  Crew members sold the stolen drugs and divided the proceeds among themselves.  To date, the prosecution has resulted in the conviction of two NYPD officers and one NYPD auxiliary officer, all of whom participated in multiple drug robberies. 

Nolasco was a particularly violent member of the robbery crew who participated in at least 15 robberies and attempted robberies, during which he and his co-conspirators robbed narcotics traffickers of at least 118 kilograms of cocaine and $150,400 in U.S. currency. 

During one such robbery in upper Manhattan in 2005, Nolasco shot and killed a narcotics trafficker who refused to reveal the location of drugs.  Nolasco and his co-conspirator later recovered two kilograms of cocaine from the victim’s apartment.  During an attempted robbery of a residence in the Bronx in 2005, Nolasco and his co-conspirators broke down the rear door with a sledgehammer, entered the residence, and handcuffed four occupants of the house.  Nolasco then personally threatened these victims at gunpoint.  During a robbery in Queens in 2006, Nolasco and his co-conspirators, impersonating police officers, abducted a drug trafficker and brought him to his stash house.  While forcing the drug trafficker into the stash house, the crew encountered two additional drug traffickers.  Nolasco jumped on one of the drug traffickers and placed a gun to his head until he revealed the location of drugs at the stash house.

In another incident in June 2006, Nolasco attempted to murder two drug traffickers in the Bronx.  A few weeks earlier, the drug traffickers had provided Nolasco with 10 kilograms of cocaine to sell.  When the drug traffickers met with Nolasco to collect the narcotics proceeds, Nolasco shot them rather than pay them the money from the sale.  After shooting both drug traffickers in the abdomen, Nolasco tried to complete the murder with shots to each victim’s head but his gun jammed twice.  Both drug traffickers survived the shooting.

Mr. Capers extended his grateful appreciation to the DEA New York Drug Enforcement Task Force, comprising agents and officers of the DEA, New York City Police Department, and New York State Police; and U.S. Immigration and Customs Enforcement, Homeland Security Investigations.

The government’s case is being prosecuted by Assistant United States Attorneys Alexander Solomon, Douglas M. Pravda, and Sylvia S. Shweder. 

The Defendant:

NELSON NOLASCO
Age: 44
Dominican Republic

E.D.N.Y. Docket No. 08-CR-242

 

Earlier today, David Gotterup pleaded guilty at the federal courthouse in Brooklyn, New York, to conspiracy to commit wire fraud by defrauding distressed homeowners in a loan modification scheme.  When sentenced, Gotterup faces up to 30 years in prison, as well as restitution, criminal forfeiture, and a fine.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Christina Scaringi, Special Agent-in-Charge, U.S. Department of Housing and Urban Development, Office of Inspector General (HUD/OIG); and Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).

According to court filings and facts presented at the guilty plea proceeding, from 2008 to 2012, Gotterup and his co-conspirators made a series of false promises to convince more than a thousand distressed homeowners seeking relief through government mortgage modification programs to pay thousands of dollars each in advance fees to numerous companies owned or controlled by Gotterup, including Express Modifications, Express Home Solutions, True Credit Empire, LLC, Green Group Today, Inc., The Green Law Group, Inc., and JG Group.  Among other things, Gotterup directed telemarketers and salespeople to lie to distressed homeowner victims by telling them that they were preapproved for loan modifications and that they were retaining a law firm and an attorney who would complete their mortgage relief applications and negotiate with the banks to modify the terms of their mortgages.  Contrary to these representations, Gotterup and his co-conspirators did little or no work in connection with these fraudulently induced advanced fees.  Gotterup was arrested in October 2015 and remains incarcerated. 

In announcing the guilty plea, Mr. Capers extended his appreciation to the agencies that led the government’s investigation and thanked the U.S. Small Business Administration and the Staten Island District Attorney’s Office for their assistance.

Today’s guilty plea took place before United States District Judge Nicholas G. Garaufis. 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Sylvia Shweder and Bonni Perlin are in charge of the prosecution.

*          *          *

This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state’ and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, visit http://www.StopFraud.gov.

The Defendant:

DAVID GOTTERUP
Age:  36
Oceanside, New York

E.D.N.Y. Docket No. 15-CR-498 (NGG)

A two-count indictment was unsealed this week in the United States District Court in Brooklyn charging six defendants with conspiracy to distribute cocaine and/or money laundering.  Yesterday, a United States Postal Carrier assigned to the Highbridge Postal Station in the Bronx was arraigned before Magistrate Judge Viktor V. Pohorelsky at the federal courthouse in Brooklyn.  Today, four additional members of the organization were arrested.  Three of the defendants are scheduled to be arraigned today before Magistrate Judge Pohorelsky.  The fifth defendant, Carlos Bello Tirado, will be arraigned today in the Middle District of Florida, and the government will seek his removal to New York.

The charges and arrests were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Angel M. Melendez, Special Agent-in-Charge, New York Field Office, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI); Phillip R. Bartlett, Postal Inspector-in-Charge, United States Postal Inspection Service, New York Field Office, and Eileen Neff, Special Agent-in-Charge, United States Postal Service, Office of Inspector General (OIG), Northeast Field Office.

As detailed in the indictment and other court filings by the government, between approximately 2011 and 2013, the defendants Kelvin Cisnero Santos, Saul Ovalles Corniel, Carlos Bello Tirado, Ernest Pena, and Jermaine Sandifer were members of a large-scale drug trafficking organization based in the Bronx.  The organization purchased hundreds of kilograms of cocaine from suppliers in Puerto Rico, packaged the drugs, and sent the drug-laden parcels through the mail from Puerto Rico to pre-arranged addresses in the Bronx.  The defendant Sandifer, a United States postal carrier, intercepted those parcels at the post office and delivered them to members of the organization.  According to the detention letter filed by the government, each parcel sent to Sandifer contained approximately one to two kilograms of cocaine, and Sandifer was paid between $1,000 and $5,000 per parcel. The defendants also conspired to mail cocaine from Puerto Rico to numerous post office boxes operated by the organization in Queens, Brooklyn, the Bronx, and New Jersey.  The cocaine was sold to various distributors in New York and New Jersey.       

Defendants Santos, Corniel, Tirado, Pena, and others laundered proceeds from the drug sales through bank accounts in the New York metropolitan area to pay suppliers and make additional purchases of cocaine. 

“However creative drug traffickers are in delivering their lethal product to our shores and the streets of our communities, we and our partners in law enforcement are committed to stopping them.  The defendants will now be held to account,” stated United States Attorney Capers.  Mr. Capers extended his grateful appreciation to the Drug Enforcement Administration, New York Field Office; the Internal Revenue Service, Criminal Investigations, New York Field Office; the Port Authority of the New York and New Jersey Police Department; the New York City Police Department; and the Queens District Attorney’s Office for their assistance in this case.

“This U.S. postal employee allegedly used his trusted position as a letter carrier to conspire with others to flood our streets with hundreds of kilos of cocaine,” said Special Agent-in-Charge Melendez.  “HSI and its law enforcement partners are committed to dismantling drug trafficking organizations that wreak havoc on our neighborhoods.”

“Postal Inspectors along with our law enforcement partners take the security and safety of the U.S. Mail very seriously, and will vigorously pursue and bring to justice anyone who uses our nations mail system to facilitate the transport of illegal drugs,” said Inspector-in- Charge Bartlett.

Special Agent-in-Charge Neff stated, “USPS-OIG investigations help to maintain the integrity of Postal Service processes and personnel.  In rare situations such as this, with a Postal Service employee allegedly abusing a position of trust, our Special Agents work jointly with our law enforcement partners to investigate those who transport illegal narcotics through the U.S. Mail.”  

The charges in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.  If convicted, the defendants face a mandatory minimum sentence of ten years and a maximum penalty of life imprisonment.

The government’s case is being handled by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Douglas M. Pravda and Julia Nestor are in charge of the prosecution.

The Defendants:

KELVIN CISNERO SANTOS
Age:  48
Bronx, New York

SAUL OVALLES CORNIEL
Age:  40
Newark, New Jersey

CARLOS BELLO TIRADO
Age:  40
Leesburg, Florida

ERNEST PENA
Age:  40
Bronx, New York

Jermaine sandifer
Age:  40
Perth Amboy, New Jersey

E.D.N.Y. Docket No. 16-CR-309

Earlier today in federal court in Brooklyn, Erdal Kuyumcu, the chief executive officer of Global Metallurgy, LLC, a company based in Woodside, New York, pleaded guilty to one count of conspiring to violate the International Emergency Economic Powers Act in connection with the export of specialty metals from the United States to Iran.  Today’s plea proceeding took place before Chief United States District Judge Dora L. Irizarry.  

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and John P. Carlin, Assistant Attorney General for National Security.

As detailed in the criminal information to which he pleaded guilty and in related court filings, Kuyumcu, a United States citizen, conspired to export from the United States to Iran a metallic powder composed of cobalt and nickel without having obtained the required license from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).  The metallic powder can be used to coat gas turbine components, such as turbine blades, and can also be used in aerospace, missile production, and nuclear applications.  Such specialized metals are closely regulated by the U.S. Department of Commerce to combat nuclear proliferation and protect national security, and exporting them without an OFAC license is illegal.  Kuyumcu and others conspired to obtain over one thousand pounds of the metallic powder from a U.S.-based supplier for export to Iran.  To hide the true destination of the goods from the U.S. supplier, Kuyumcu and a co-conspirator arranged for the metallic powder to be shipped first to Turkey and then to Iran. 

In announcing the guilty plea, Mr. Capers extended his grateful appreciation to the Federal Bureau of Investigation, New York Field Office, and the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office, the agencies that led the government’s investigation.

At sentencing, Kuyumcu faces up to 20 years in prison a $1 million fine. 

The case is being prosecuted by Assistant U.S. Attorneys Tiana A. Demas and Ameet B. Kabrawala of the Eastern District of New York, with assistance from Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.

The Defendant:

ERDAL KUYUMCU
Age:  44
Woodside, New York

E.D.N.Y. Docket No. 16-CR-308 (DLI)

Erdal Kuyumcu, 44, the CEO of Global Metallurgy LLC, a company based in Woodside, New York, pleaded guilty to one count of conspiring to violate the International Emergency Economic Powers Act, in connection with the export of specialty metals from the United States to Iran.

The guilty plea was announced by Assistant Attorney General for National Security John P. Carlin and U.S. Attorney Robert L. Capers of the Eastern District of New York.

As detailed in the criminal information to which he pleaded guilty and other court filings, Kuyumcu, a U.S. citizen, conspired to export from the United States to Iran a metallic powder composed of cobalt and nickel, without having obtained the required license from the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC).  The metallic powder can be used to coat gas turbine components, including turbine blades, and can be used in aerospace, missile production and nuclear applications.  Such specialized metals are closely regulated by the U.S. Department of Commerce to combat nuclear proliferation and protect national security, and exporting them without an OFAC license is illegal.  Kuyumcu and others conspired to obtain over 1,000 pounds of the metallic powder from a U.S.-based supplier for export to Iran.  To hide the true destination of the goods from the U.S. supplier, Kuyumcu and a co-conspirator arranged for the metallic powder to be shipped first to Turkey and then to Iran. 

Kuyumcu pleaded guilty before Chief U.S. District Judge Dora L. Irizarry of the Eastern District of New York.   At sentencing, he faces up to 20 years in prison and a $1 million fine.

Assistant Attorney General Carlin joined U.S. Attorney Capers in thanking the FBI’s New York Field Office and the U.S. Department of Commerce, Bureau of Industry and Security, Office of Export Enforcement, New York Field Office. 

The case is being prosecuted by Assistant U.S. Attorneys Tiana A. Demas and Ameet B. Kabrawala of the Eastern District of New York, with assistance from Trial Attorney David Recker of the National Security Division’s Counterintelligence and Export Control Section.

Kuyumcu Information

Earlier today in Central Islip, NY, Jeffrey I. Stark, an attorney admitted to practice law in New York, was sentenced to 16 months’ imprisonment to be followed by three years of supervised release based on his guilty plea on August 7, 2015, for forgery of a judicial signature.  The sentencing proceeding was held before U.S. District Judge Arthur D. Spatt.  

The charge against Stark arose after he was retained in 2012 by a couple to file bankruptcy proceedings on their behalf in the United States Bankruptcy Court for the Eastern District of New York.  Stark never filed a bankruptcy petition and instead provided the couple with a fake discharge order bearing the forged signature of a United States Bankruptcy Judge.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.

In announcing the sentence, United States Attorney Capers stated, “Attorneys, as trusted officers of the court, are rightfully held to a high standard of conduct, and Mr. Stark violated the trust of his clients and the court by his criminal conduct here.” Mr. Capers expressed his grateful appreciation to the FBI, the agency responsible for leading the government’s the investigation.

Stark was suspended from the practice of law on November 20, 2013, by the New York State Appellate Division, 1st Department.

The government’s case was prosecuted by Assistant United States Attorney Allen L. Bode. 

The Defendant:

JEFFREY I. STARK
Age: 53
Residence:  Massapequa, New York

Four indictments and two complaints were unsealed today in United States District Court for the Eastern District of New York charging 14 defendants for their involvement in narcotics trafficking and illegal weapons possession in the Cypress Hills Houses, a New York City Housing Authority complex located in East New York, Brooklyn.  

The defendants’ initial appearances and arraignments are scheduled this afternoon before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn. 

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and William J. Bratton, Commissioner, New York City Police Department (NYPD).

“These charges send the message that the United States Attorney’s Office stands fully in support of the residents of the Cypress Hills Houses who have been victimized too long by those who have been flooding their neighborhood with guns and drugs,” stated United States Attorney Capers.  Mr. Capers thanked the Kings County District Attorney’s Office for their assistance with the government’s investigation.

“The scope and nature of this investigation reads like something out of a Hollywood movie script, involving a massive drug trafficking network and deadly violence.  But the actions of these alleged gang members who have held a community hostage are real and have real consequences that the FBI NY Metro Safe Streets Task Force, the NYPD, and our law enforcement partners won’t allow them to escape,” said FBI Assistant Director-in-Charge Rodriguez.

“As alleged, the members of the Cypress Hills neighborhood have seen drugs and guns pour into our streets.  The department targeted the crime with the same precise, targeted policing that has been used in the hundreds of arrests we have made in recent months,” said Police Commissioner Bratton.  “This is the latest in our increasing and on-going efforts to arrest gangs and crews who carry weapons, deal drugs, or commit violence.  Thanks as always to the FBI and the Eastern District of New York for their continued commitment to making our city safer with today’s enforcement.” 

As alleged in the various documents filed in court by the government, the Cypress Hills Houses (“Cypress”) have been besieged in recent years by gang- and drug-related violence, including numerous homicides and a significant number of non-fatal shootings.  In response to this criminal activity inflicted on the residents of the more than 1,400 apartments in Cypress, since November 2015, the FBI, the NYPD, and the U.S. Attorney’s Office have been conducting an investigation of a neighborhood-based street gang known as the Back Side crew – the Back Side refers to the section of Cypress that borders Euclid Avenue.  The investigation revealed that in recent years, the Back Side crew has closely aligned with members of the Team Side crew – the Team Side refers to the section of Cypress that borders Fountain Avenue – and that some members of the two crews self-identify as members of the Crips criminal street gang.

The government’s investigation included court-authorized wiretaps of telephones used by the defendants, which confirmed the existence of a large-scale drug trafficking operation and in which all of the defendants charged in United States v. Renee Belardo, et al., 16-CR-297 (AMD), one of the indictments unsealed today, were active participants.  During just a five-month period, that operation was responsible for the distribution of more than a kilogram of cocaine powder that was cooked into more than 280 grams of crack cocaine and distributed in and around Cypress and upstate New York. 

The investigation also revealed that some of the defendants were involved in firearms trafficking, illegal weapons possession, and other criminal conduct, including a large-scale and fraudulent credit card scheme.  On May 3, 2016, pursuant to a lawfully-authorized search warrant, the FBI seized and searched a Fed-Ex package that one defendant attempted to ship to a co-conspirator in Georgia containing more than 1,300 fraudulently manufactured credit cards that bore no name or stored information.

The other charging instruments unsealed today include three indictments: United States v. Jason Soto, 16-CR-298 (ILG); United States v. James Young, 16-CR-296 (BMC); United States v. Darnell Clinkscale, 16-CR-299 (ARR); and two criminal complaints: United States v. Guillermina Escobar, 16-M-483; and United States v. Nicholas Medina, 16-M-481.

If convicted of the narcotics charges, Tyriek Hankins, Isiah Sadler, Anthony Keitt, Michael Vailes, Dimas Perez, and Ronald Jackson each face a maximum of life imprisonment. 

The charges are all merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Margaret Gandy and Andrey Spektor are in charge of the prosecution.

 

The Defendants:

RENEE BELARDO
Age:  30
Brooklyn, New York

DARNELL CLINKSCALE
Age:  28
Brooklyn, New York

GUILLERMINA ESCOBAR
Age:  26
Brooklyn, New York

TYRIEK HANKINS
Age:  29
Brooklyn, New York

RONALD JACKSON
Age:  37
Utica, New York

ANTHONY KEITT
Age:  36
Brooklyn, New York

NICHOLAS MEDINA
Age:  18
Brooklyn, New York

DIMAS PEREZ
Age:  38
Brooklyn, New York

RAFAEL PEREZ
Age:  50
Brooklyn, New York

ISIAH SADLER
Age:  31
Brooklyn, New York 

JASON SOTO
Age:  27
Brooklyn, New York 

CHERENA SWAIN
Age:  29
Brooklyn, New York

MICHAEL VAILES
Age:  29
Brooklyn, New York 

JAMES YOUNG
Age:  31
Brooklyn, New York

A member of a Mexican sex trafficking organization, Paulino Ramirez-Granados, has pleaded guilty to federal charges relating to the sex trafficking of a woman from October 2000 to December 2008.  The guilty plea was entered before United States District Judge Kiyo A. Matsumoto at the U.S. Courthouse in Brooklyn.  When sentenced, Ramirez-Granados faces a mandatory minimum sentence of 15 years’ imprisonment and a maximum sentence of life imprisonment.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Angel Melendez, Special Agent-in-Charge, New York Field Office, U.S. Immigration and Customs Enforcement (ICE), Homeland Security Investigations (HSI).  In announcing the guilty plea, Mr. Capers extended his grateful appreciation to HSI, the agency responsible for leading the government’s investigation. 

At today’s proceeding,  Ramirez-Granados admitted to bringing a woman from Mexico to New York between October 2000 and December 2008, and forcing her, using threats and violence, to work as a prostitute in Queens, New York, and elsewhere.  Ramirez-Granados also admitted that he obtained money from the prostitution that his victim was forced to perform.  Pursuant to his plea agreement with the government, Ramirez-Granados also admitted to trafficking an additional victim and agreed to pay restitution to both victims.

As set forth in court filings, between October 1998 and June 2011, members of the Granados sex trafficking organization, including Ramirez-Granados, illegally smuggled young women into the United States, where they were forced to work as prostitutes in New York City and elsewhere.  The organization collected profits from the victims’ activities.  When victims refused to work or resisted, members of the organization beat and sexually assaulted the victims, and threatened the victims’ family members in Mexico, including the victims’ children.

To date, 13 members of the Granados organization have been indicted in the Eastern District of New York on sex trafficking charges.  Twelve have been arrested, and one remains a fugitive.  Two high-ranking members of the group, Eleuterio Granados-Hernandez and Samuel Granados-Hernandez, who are brothers, pled guilty to sex trafficking and were sentenced by Judge Kiyo A. Matsumoto in 2014 to 22 years and 15 years, respectively.

During the course of the investigation, law enforcement identified and rescued over 20 additional victims — all Mexican nationals.  Several victims were sexually assaulted by their traffickers, while others were physically assaulted.  All the victims said the traffickers threatened to harm their family members.

The government’s case is being prosecuted by Assistant United States Attorneys Soumya Dayananda and Jennifer Carapiet.

The Defendant:

Name: PAULINO RAMIREZ-GRANADOS
Age: 38

E.D.N.Y. United States v. Paulino Ramirez-Granados, 11-CR-557 (KAM)

 

Earlier today in Central Islip, NY, William Scully, the president of Pharmalogical, Inc. (Pharmalogical) d/b/a Medical Device King and MDK, and Taranis Medical Corp. (Taranis), was sentenced to 60 months’ imprisonment and ordered to forfeit to the government close to $900,000 in criminal proceeds, following his conviction on November 12, 2015, after a six-week jury trial, of 64 felonies for mail and wire fraud, violations of the Food Drug & Cosmetic Act (FDCA), unlicensed wholesale distribution of prescription drugs, and multiple related conspiracy charges.

The convictions arose from Scully’s leadership role in a long-running scheme to sell misbranded and unapproved pharmaceutical products, including chemotherapy drugs for infusion into Stage 4 cancer patients, to medical providers across the United States.   Evidence elicited at trial from 40 witnesses established that Scully deceived a wide array of doctors and cancer clinics into believing that he was selling legitimate FDA-approved products when, in reality, he was selling unapproved products imported through a series of unidentified middlemen in Turkey and elsewhere overseas.  Many of the products Scully sold were highly sensitive, so-called “cold-chain” biologic drugs that did not have FDA-required warnings of potentially deadly side effects.  The sentencing proceedings were held before U.S. District Judge Arthur D. Spatt.  

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Director George M. Karavetsos, Food and Drug Administration, Office of Criminal Investigations, New York.

“Those considering bypassing the FDA’s regulatory authority by selling unapproved and misbranded pharmaceutical products jeopardize the health and well-being of our nation’s patient population.  All such individuals are on notice that they will be prosecuted to the fullest extent of the law,” stated United States Attorney Capers.  Mr. Capers expressed his grateful appreciation to the FDA for its assistance in the investigation and prosecution of the defendant.

“This sentence reflects the serious nature of the defendant’s actions,” said FDA Office of Criminal Investigations Director Karavetsos.  “Americans must have confidence that the drugs they are receiving are safe, effective and fully comply with U.S. laws.  Our office will aggressively pursue those who place patients at risk and who seek to profit from the importation and distribution of potentially dangerous foreign unapproved drugs.”

Scully owned and operated Pharmalogical, MDK, and Taranis, which collectively sold over $17 million in pharmaceutical drugs and devices.  Scully purchased these products through wholesalers overseas and received them in the United States with shipping labels stating “product samples” with “no commercial value,” even though the packages often contained tens of thousands of dollars of misbranded and unapproved prescription drugs.  Scully would then execute “bait-and-switch” transactions with doctors by advertising FDA-approved products on his website but then sending them misbranded and unapproved products.  Several doctors and health care professionals testified at trial that Scully deceived them into believing that the drugs they were purchasing were FDA-approved and legal.  Ultimately, the drugs were infused into patients, including cancer patients and patients with Crohn’s disease. 

Scully continued to sell these drugs well after his office was searched by FDA agents and all of his existing products were seized.  To conceal the continued sales, he covertly set up a new company, Taranis, which he operated without a license and out of a storage space where he kept the drugs.  Even after that storage space was searched and additional products were seized, Scully continued selling products to unsuspecting doctors. 

The government’s case was prosecuted by Assistant United States Attorneys Charles P. Kelly and Kenneth M. Abell. 

 

The Defendant:

WILLIAM SCULLY
Age: 47
Residence:  Commack, New York

 

 

The United States filed a civil complaint in the U.S. District Court for the Eastern District of New York against an individual and two Dutch companies that allegedly engaged in multiple international mail fraud schemes that have defrauded elderly and vulnerable U.S. victims out of tens of millions of dollars, the Department of Justice announced.  The Department sought a temporary restraining order, which was entered by the court yesterday, as well as preliminary and permanent injunctions to prevent the defendants from further victimizing U.S. consumers. 

According to the complaint, U.S. residents received fraudulent direct mail solicitations that falsely claimed that the individual recipient had won, or would soon win, cash or valuable prizes or otherwise come into great fortune.  Victims sent payments through the U.S. and international mail systems to defendants Trends Service in Kommunikatie, B.V. (Trends), and Kommunikatie Service Buitenland, B.V. (KSB), both in Utrecht, Netherlands, and both owned and operated by defendant Erik Dekker, 54, of Langbroek, Netherlands.

At the same time that the Justice Department took this law enforcement action, Dutch law enforcement agents executed search warrants on the business address used by both companies and on Dekker’s home address.  The Dutch authorities also took control of the Dutch P.O. boxes used by the defendants to receive victim funds.  The coordinated U.S. and Dutch enforcement actions seek to immediately stop the use of Dutch P.O. boxes to receive payments from fraud victims and to immediately stop the defendants from continuing to victimize the elderly.  Learn more about the actions taken by Dutch authorities at: https://www.om.nl/actueel/nieuwsberichten/@94702/fiod-and-us-doj/

“As alleged in the complaint, defendants act as the clearinghouses for multiple international mail fraud schemes, taking money from thousands of elderly and vulnerable victims not only in this district but also throughout the United States,” said U.S. Attorney Robert L. Capers for the Eastern District of New York.  “Together with the U.S. Postal Inspection Service and our international partner, the Fiscal Intelligence and Investigation Division of the Netherlands, we will track down, and stop, the schemes wherever they lead.”  

“Schemes targeting elderly victims are increasingly international in scope, but geographic distance will not prevent us from seeking justice and holding bad actors accountable,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Dutch authorities have done a great service to U.S. residents and elderly victims worldwide by addressing fraud facilitated within their borders.  The Justice Department will continue to work with our international law enforcement partners to put a stop to fraud schemes that exploit vulnerable Americans.”

“No one should ever be told they must pay a fee, or make a worthless purchase, to collect a prize,” said Inspector in Charge Regina L. Faulkerson.  “When that happens, it’s fraud - plain and simple - and Postal Inspectors work to keep those falsehoods out of the U.S. mail.”

The complaint filed June 1 in U.S. federal court in the Eastern District of New York alleges that, since at least 2012, Trends, KSB and Dekker have used P.O. boxes in the Netherlands to receive payments from various predatory mass-mailing fraud schemes.  Solicitations are mailed from locations around the globe to residents in the United States.  The solicitations purport to be personalized to each individual recipient, even though they are form letters mailed to hundreds of thousands of potential victims.  Some solicitations instruct recipients to pay a processing fee in order to receive lottery winnings or other prizes; other solicitations urge recipients to purchase goods or services based on false promises that they will guarantee future lottery wins.

As alleged in the complaint, victims responded to the solicitations by completing a form and submitting a payment, usually around $15 to $55, via U.S. mail.  The solicitations contain pre-addressed envelopes in which victims send payments.  The envelopes are addressed to P.O. boxes in the Netherlands.  Trends and KSB operate more than 50 of these P.O. boxes.  Like other so-called “caging services,” Trends and KSB open the payment envelopes, remove the contents, enter payment and other personal information from the victims into a database, and handle victim payments.  The U.S. government estimates that U.S. victims mail more than $18 million annually to the defendants’ P.O. boxes.

The government is seeking an injunction under the Anti-Fraud Injunction Statute immediately shutting down the defendants’ role in the fraudulent schemes in order to protect U.S. victims from further harm.  The injunctions sought by the United States would enjoin the defendants from using the U.S. mail, or causing the U.S. mail to be used, to distribute the fraudulent solicitations or to collect victim payments, and from selling lists of American victims who have responded to the solicitations.  If granted, a permanent injunction would allow the U.S. Postal Service to intercept mail heading to the defendants, and return that mail - along with any money being sent to the defendants - to U.S. victims.

U.S. District Court Judge I. Leo Glasser for the Eastern District of New York set a hearing on the preliminary injunction on July 18 at 10 a.m.

The United States’ case is being handled by Assistant U.S. Attorney John Vagelatos of the U.S. Attorney’s Office in the Eastern District of New York, Trial Attorney Kerala Thie Cowart of the Civil Division’s Consumer Protection Branch, and Postal Inspector Joseph R. Bizzarro of the U.S. Postal Inspection Service.

The claims made in the complaints are allegations only, and there has been no determination of liability.

A copy of the complaint can be found here: The Complaint and exhibits

More information on fraud against the elderly is available here:  https://www.justice.gov/elderjustice/.

For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny. 

Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.

E.D.N.Y. Docket No. 16-CV-2770 (ILG)(SMG)

WASHINGTON – Ten Assistant United States Attorneys from the U.S. Attorney’s Office for the Eastern District of New York and three federal agents were among the 160 members of the Department of Justice recognized by Deputy Attorney General Attorney General Sally Yates, and Executive Office for U.S. Attorneys (EOUSA) Director Monty Wilkinson at the 32nd annual Director’s Awards Ceremony today in Washington D.C.

The Eastern District of New York was one of 33 districts represented at the ceremony which was held in the Great Hall at the Robert F. Kennedy Department of Justice Building.

In her prepared remarks, Deputy Attorney General Yates said, “The achievements being recognized today reflect the breadth of the department’s responsibilities, and some of our most significant challenges.   From dismantling dangerous gangs, drug cartels, and human trafficking operations to tackling political corruption, white collar crimes, and international terrorism, these awardees have taken on our toughest cases.  And the citizens of our country are safer because of their work.” 

“We honor the truly talented and dedicated legal and administrative personnel in the 94 U.S. Attorneys’ Offices and our law enforcement partners who everyday touch lives in our communities, protect the American people, and work to ensure the fair and impartial administration of justice,” said Director Wilkinson.

Executive Assistant United States Attorney Orelia E. Merchant received the award for Superior Performance as an AUSA-Civil for her exemplary performance and leadership in coordinating the handling of over 1,300 cases arising out of Hurricane Sandy, a disaster that affected over 100,000 homeowners in the EDNY in October 2012.  Ms. Merchant was instrumental in achieving favorable results for homeowners, while protecting FEMA’s legal, policy, and programmatic interests.

Assistant United States Attorneys Shreve Ariail, Samuel Nitze, and Rena Paul received the award for Superior Performance as an AUSA- Criminal for the prosecution of Ronald Herron.  The Gowanus and Wyckoff Gardens neighborhoods in Brooklyn were terrorized for nearly two decades by Herron, a high-ranking member of the “Murderous Mad Dawg” Bloods.  During the trial on a 21-count racketeering indictment that included multiple murder charges, Herron and his henchmen threatened witnesses and harassed victim families.  Notwithstanding these obstructive efforts, the team obtained convictions on all counts, ridding the district of one of New York’s most dangerous criminals. Herron was sentenced to 12 life terms in prison.

Assistant United States Attorneys Zainab Ahmad and Hilary Jager received the award for Superior Performance as an AUSA - Criminal for the prosecution of al-Qaeda in the Arabian Peninsula (AQAP) operative Lawal Olaniyi Babafemi.  Babafemi traveled from Nigeria to Yemen in 2010-2011, where he met with AQAP leaders who trained him in the importance of the English-language media to AQAP and its mission to inspire lone wolf attacks abroad in the name of al-Qaeda.  Babafemi was extradited to the United States from Nigeria, pled guilty, and sentenced to 22 years of imprisonment.  The case was significant as it related to efforts to prosecute individuals who not only engage in physical violence, but also who create and disseminate violent terrorist propaganda world-wide.      

Assistant United States Attorneys James Loonam, Matthew Amatruda, Soumya Dayananda, Rena Paul, Paralegal Specialist Tareva Torres, FBI Special Agent James Glynn, and HSI Special Agents Anthony Salisbury and Mathew Doyle received the award for Superior Performance By A Litigative Team for their performance in the more than ten-year investigation and prosecution of the Cash Money Brothers (CMB), an ultra-violent gang that controlled the Lafayette Gardens housing development in Brooklyn.  The investigation culminated in the 2015 trial conviction and life sentence of the leader of CMB, Damion “World” Hardy, and his top enforcer, Aaron Granton, for RICO violations, five murders in-aid-of racketeering, one murder-for-hire, and narcotics trafficking. 

EOUSA provides oversight, general executive assistance, and direction to the 94 United States Attorneys’ Offices around the country.  For more information on EOUSA and its mission, visit http://www.justice.gov/usao.

 

Earlier today, Andrew Barrett, a New York pharmacist and pharmacy owner, pleaded guilty to health care fraud and filing false tax returns.  From January 2011 to December 2012, Barrett operated pharmacies in Bronx, Rockland, and Queens counties in New York State. From his Queens pharmacy, Barrett fraudulently billed Medicare and Medicaid approximately $2.7 million for prescription medications that he never dispensed to patients.  Barrett also siphoned off over $2.6 million for personal expenses from the Bronx and Rockland pharmacy accounts while falsely claiming those funds as business expenses on his tax returns.  When sentenced, Barrett faces up to ten years in prison, as well as restitution, criminal forfeiture, and a fine.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Scott J. Lampert, Special Agent-in-Charge, Department of Health and Human Services, Office of Inspector General, New York Office (HHS-OIG); and Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI).

In announcing the guilty plea, Mr. Capers extended his grateful appreciation to the agencies that led the government’s investigation and thanked the New York Office of the Medicaid Inspector General for its cooperation and assistance in the case.

According to the court filings and facts presented at the guilty plea hearing, from his Queens pharmacy, Barrett falsely billed government health care programs approximately $2.7 million for drug products, including a substantial number of HIV-AIDs medications which he never dispensed to patients.  Barrett’s scheme involved billing for refills of costly medications even although patients never requested or received them, and doctors had not authorized the refills to be dispensed.  Barrett also wrote checks for over $2.6 million to himself to pay for his personal expenses from the Bronx and Rockland pharmacy accounts while falsely claiming those funds as business expenses on his personal and corporate tax returns.       

Today’s plea took place before United States Magistrate Judge Viktor V. Pohorelsky. 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys William P. Campos and Erin E. Argo are in charge of the prosecution.  Assistant United States Attorney Karin Orenstein of the Office’s Civil Division is responsible for the forfeiture of assets.    

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ Offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

The Defendant:

ANDREW BARRETT
Age:  57
 

E.D.N.Y. Docket No. 15-CR-103

A criminal complaint was unsealed today in federal court in Brooklyn, New York, charging Michael Rizzi, a retired NYPD Police Officer, with conspiring to launder the proceeds of a multi-million dollar prostitution operation.  Rizzi was arrested earlier today, and his initial appearance is scheduled for this afternoon before United States Magistrate Judge Viktor Pohorelsky at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement, Homeland Security Investigations (HSI), New York; and William J. Bratton, Commissioner, New York City Police Department (NYPD).

As is alleged in the complaint, between June 2012 and May 2016, Rizzi owned and operated BJM/Manhattan Stakes and Entertainment (BJM), a company that provided high-end prostitution services to customers in the New York metropolitan area.  Until January 2016, BJM had an office located at 466 Wild Avenue in Staten Island.  BJM advertised its services on more than 50 websites, including janeblow.com, nycescortsnyc.com, alluringcompanions.com, lushplaymates.com, plushplaymates.com, lusciouscompanions.com, iconcompanionsnyc.com, pureplaymates.com, perfect10club.com, flygirlsnyc.com, and eliteescortsnyc.com.  BJM’s employees included telephone bookers who arranged appointments between prostitutes and BJM’s customers, as well as drivers who collected cash and receipts from BJM’s prostitutes.  

The government’s investigation revealed that Rizzi accepted applications for his “escort” business using his email account.  One applicant responded, “I am a fun loving girl who loves sex…  I love sex and if I can get paid for it why not?”

BJM is a successor to Pure Platinum Models, a company that offered prostitution services.  In 2012, the NYPD and HSI opened an investigation into Pure Platinum Models for various criminal offenses, including promotion of prostitution and money laundering.  Pure Platinum Models was closed in 2014, and its owner was convicted of laundering more than one million dollars through the company.  In 2012, BJM began providing many of the same prostitution services as Pure Platinum Models and used many of the same websites, employees, and prostitutes to conduct its business. 

The prostitutes working for BJM charged their customers as much as $2,000 an hour.  The investigation into the company’s financial records revealed that several of BJM’s customers each spent more than $100,000 for the company’s services, and that some clients paid more than $25,000 for a single night.  Over the course of its operations, BJM collected millions of dollars of payments, including more than $2 million in credit card payments alone between October 2012 and March 2016.  A review of various personal and business bank accounts maintained by Rizzi revealed that they were used to promote the prostitution business by laundering almost $200,000 disbursed via Paychex for BJM employee salaries, $25,000 to tollforwarding.com for forwarding phone numbers listed on various of Rizzi’s websites to his phone bookers, $10,000 to GoDaddy.com through which Rizzi registered over 80 websites pertaining to his prostitution business, and $112,000 to Electronic Merchant Services for processing the more than $2 million customer credit card transactions referred to above.

Earlier today, law enforcement executed search warrants at two addresses associated with BJM, as well as a vehicle paid for with business proceeds.  The government also took steps to restrain more than 50 domain names registered to Rizzi that were associated with BJM and unsealed a civil complaint seeking the forfeiture of a residence in Florida which Rizzi purchased with the alleged criminal proceeds from his prostitution enterprise.

United States Attorney Capers stated, “The investigation and prosecution of money laundering offenses is a priority program of this Office.  With this arrest, we continue to unmask organizations that launder millions of dollars through alleged criminal networks.”

“Rizzi, a former police officer, once entrusted to enforce the law now finds himself accused of breaking it by allegedly laundering money from the proceeds of an on-line prostitution ring,” stated HSI New York Special Agent-in-Charge Melendez.  “Working with our local partners at the NYPD, this arrest and HSI’s seizure of dozens of websites signify the end to this high end prostitution ring and money laundering scheme.”

NYPD Commissioner Bratton stated, “The anonymity of the internet stretches only so far.  Today, Michael Rizzi’s alleged scheme of prostitution and money laundering is up.”

The charge in the complaint is merely an allegation, and the defendant is presumed innocent unless and until proven guilty.  If convicted of money laundering conspiracy, the defendant faces a maximum sentence of 20 years’ imprisonment.

The government’s case is being prosecuted by Assistant United States Attorneys Jennifer S. Carapiet, Erik D. Paulsen, and Claire Kedeshian.

 

The Defendant:

MICHAEL RIZZI
Age: 44
Brooklyn, New York

E.D.N.Y. Docket No. 16-MJ-00487

Robert L. Capers, United States Attorney for the Eastern District of New York, and James J. Hunt, Special Agent in Charge, U.S. Drug Enforcement Administration (DEA), New York Division, today announced the filing of a civil complaint seeking injunctive relief and penalties against Roger Kaplan and Choice Medical Services, P.C. (“Choice”), formerly known as Choice Spine Joint & Neurology, a clinic that was located in Rocky Point, New York.  The complaint also seeks the forfeiture of 13 pieces of real property located in New York and Florida, approximately $400,000 held in bank accounts, as well as a Bentley and other vehicles.  Each of the named assets is linked to Choice’s illegal distribution of highly addictive opioids, such as oxycodone and hydrocodone.  The action, filed in federal court in Central Islip, has been assigned to United States District Judge Leonard D. Wexler.  United States v. Roger Kaplan, et al., 16-CV-2601.

As alleged, Choice was managed by Kaplan, a chiropractor who, through a family-owned company, owned the Rocky Point premises where the clinic operated and, who, along with family members, received most of the clinic’s millions of dollars in revenue.  The complaint focuses on the period from 2006 to the Spring of 2015, during which doctors employed by Choice prescribed highly addictive opioids to patients despite the absence of any legitimate medical need.  One Choice doctor lost her medical license following a proceeding before the New York State Department of Health, Office of Professional Medical Conduct.  At the proceeding, that doctor, through her attorney, acknowledged that Choice was a “pill mill.” Another Choice doctor, a sleep specialist, pled guilty in federal court in Central Islip to one count of distribution of a controlled substance in violation of the Controlled Substances Act.

The civil complaint describes the enormous number of opioids prescribed at Choice.  For example, according to records maintained by the New York State Bureau of Narcotic Enforcement, during a sample 17-month period, the sleep specialist at Choice wrote prescriptions for nearly half a million 30 mg oxycodone tablets alone.  On one particular day, the sleep specialist wrote prescriptions for approximately 4,634 dosage units of opioids for the 49 patients he claimed to have seen that day.

In its complaint, the government seeks civil penalties and an injunction against Kaplan and Choice for their roles in issuing prescriptions in violation of federal law.  In addition, the government seeks the forfeiture of millions of dollars in ill-gotten gains amassed by Choice and disbursed to Kaplan and his family members, who used the funds to, among other things, pay for a number of residences located in Manhattan and in Shoreham, New York, as well as in Florida.  The government also seeks to forfeit the clinic and accounts containing the clinic’s illegal proceeds, and vehicles purchased by Kaplan and members of his family with the proceeds, including the Bentley, which Kaplan purchased for more than $163,000. 

 “We are all too familiar with the devastating harm caused to individuals, and our community as a whole, by the abuse of prescription painkillers.  Today’s filing serves as a warning to those who prey on, and profit from, people who have developed addictions to opioids,” stated United States Attorney Capers.  “We thank our partners in this coordinated investigation and prosecution to combat the unlawful distribution of opioids.” 

DEA Special Agent in Charge Hunt stated, “Roger Kaplan’s alleged offenses are an example of how an unscrupulous medical professional can take advantage of vulnerable patients and reap millions of dollars through the illegal prescription of opioids.  During the course of an eighteen-month investigation, law enforcement learned that doctors employed by Choice Medical Services, P.C., a now defunct Long Island pill mill which Kaplan controlled, prescribed thousands of pain pills a day to numerous patients in disregard of the patients’ medical conditions and needs.  I commend the men and women who worked on this investigation.  Identifying and dealing with prescription drug diversion and abuse, and depriving those who engage in such conduct of their ill-gotten gains, is critical to the mission of the DEA.”   

Opioid abuse has reached epidemic proportions throughout the United States.  According to the United States Department of Health & Human Services Centers for Disease Control and Prevention (“CDC”), on average 78 Americans died every day from an opioid overdose in 2014.  In response to the overwhelming number of prescriptions, and the mounting number of overdoses and deaths, two months ago the CDC issued new guidelines recommending that doctors prescribe less addictive and less powerful pain relievers before prescribing highly addictive drugs, and that they prescribe limited amounts. 

This case is the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York as part of the Prescription Drug Initiative.  In January 2012, this Office and the DEA,[1] in conjunction with the five District Attorneys in this district, the Nassau and Suffolk County Police Departments, the New York City Police Department, and New York State Police, along with other key federal, state and local government partners, launched the Initiative to mount a comprehensive response to the increase in opioid abuse.  To date, the Initiative has brought over 160 federal and local criminal prosecutions, including the prosecution of 22 health care professionals.  The Initiative also has resulted in civil enforcement actions against a hospital, a pharmacy and a pharmacy chain, the removal of prescription authority from numerous rogue doctors, and the expansion of information-sharing among enforcement agencies to better target and pursue drug traffickers.

The United States’ case is being prosecuted by Assistant United States Attorneys Madeline O’Connor, Laura D. Mantell and Elliot M. Schachner, with assistance from Paralegal Specialist Brian S. Gappa. 

E.D.N.Y. Docket No. 16-CV-2601

 

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[1] The investigation was led by DEA’s Long Island Tactical Diversion Squad comprising agents and officers of the DEA, Nassau County Police Department, Rockville Centre Police Department, Port Washington Police Department and Suffolk County Police Department.  In addition, the investigation was assisted by HHS/OIG and the FBI.  The Nassau County Police Department Asset Forfeiture Unit also provided invaluable assistance.

 

BROOKLYN, NY – Earlier today, Robert Bandfield, a U.S. citizen and resident of Belize, pleaded guilty to money laundering conspiracy for facilitating the stock manipulation of more than 40 U.S. publicly-traded companies and then laundering more than $250 million in profits through unidentifiable debit cards and attorney escrow accounts.  Pursuant to his plea agreement with the government, Bandfield has agreed to forfeit, among other things, $1 million and all his rights and interests in three corporate entities -- IPC Management Services LLC, IPC Corporate Services Inc., and IPC Corporate Services LLC (collectively, IPC Corp.) -- that he founded and controlled in Belize.  When sentenced, Bandfield faces up to 20 years in prison. 

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations, New York (HSI).

In announcing the guilty plea, Mr. Capers extended his grateful appreciation to the agencies that led the government’s investigation and thanked the Securities and Exchange Commission (SEC), the Department of Justice’s Office of International Affairs (OIA), the Department of State’s Diplomatic Security Service (DSS), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance in the case

According to the court filings and facts presented at the plea hearing, between January 2009 and September 2014, Bandfield and his co-conspirators engaged in three interrelated schemes: (1) to induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (2) to circumvent the payment of capital gains taxes and the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (3) to launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through debit cards and attorney escrow accounts.  Through these schemes, Bandfield helped his corrupt clients -- who included more than 100 U.S. citizens and residents -- launder more than $250 million in fraudulent proceeds.

To facilitate these interrelated schemes, Bandfield and his co-conspirators created shell companies in Belize and the West Indies for the corrupt clients and placed nominees at the helm of these companies.  This structure was designed to conceal the clients’ ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enable the corrupt investors to engage in trading under the nominee’s names through brokerage firms also set up in Belize.  For example, this structure enabled Bandfield’s clients to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK.  Bandfield’s clients concealed their ownership of “all the free trading” or unrestricted shares of CYNK through shell companies incorporated by IPC Corp.  Prior to May 15, 2014, there had been no trading in CYNK stock for 24 trading days.  Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets. 

Bandfield’s scheme also enabled the U.S. corrupt clients evade reporting requirements to the IRS by concealing the proceeds generated by the manipulated stock transactions through the shell companies and their nominees.  For example, in response to a request received by a U.S. corrupt client from a U.S. transfer agent who had to determine whether the proceeds from manipulative stock trading transaction were taxable under U.S. law, Bandfield forwarded an IRS Form signed by co-defendant Andrew Godfrey as the nominee for the shell company which had been set up at the request of the client.  At one point during the government’s investigation, Bandfield boasted to an undercover law enforcement agent that he had specifically designed this “slick” corporate structure to counter President Barack Obama’s new laws, a reference to FATCA.

An example of how the defendants’ scheme enabled U.S. corrupt clients to launder the proceeds from their fraudulent trading in U.S. public companies was the production of unidentifiable debit cards for the clients allowing them to freely transfer their proceeds back into the United States.

Today’s guilty plea took place before United States District Judge I. Leo Glasser. 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Jacquelyn Kasulis, Winston Paes, and Michael Keilty are in charge of the prosecution.  Assistant United States Attorney Brian Morris of the Office’s Civil Division is responsible for the forfeiture of assets.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

 

The Defendant: ROBERT BANDFIELD
Age:  71
Belize City, Belize

EDNY Docket No. 14-CR-476 (ILG)

 

On Friday, May 20, 2016, a complaint was unsealed in Brooklyn federal court charging Djevair Ametovski, a Macedonian citizen also known as “codeshop,” “sindrom,” and “sindromx,” with crimes related to his operation of the website Codeshop.su, a website allegedly created for the sole purpose of selling illegally obtained credit and debit card data and personal identification information for financial gain.  The charges include aggravated identity theft, access device fraud conspiracy, and wire fraud conspiracy.  The defendant is scheduled to be arraigned at 11 a.m. tomorrow, May 21, 2016, before United States Magistrate Judge Roanne L. Mann at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and David E. Beach, Special Agent in Charge, United States Secret Service, New York Field Office.

“Cybercriminals who create and operate online criminal marketplaces in which innocent victims’ financial and personal information are bought and sold erode consumer trust in modern-day payment systems and cause millions of dollars in losses to financial institutions and unsuspecting individuals.  Today marks a major step in bringing the alleged operator of one such criminal marketplace to justice, and should serve as a warning to others who seek to profit from perpetuating these fraudulent schemes,” stated United States Attorney Capers.  Mr. Capers cited the extraordinary efforts of the Secret Service, the agency responsible for leading the government’s investigation, and also thanked the Slovenian Ministry of the Interior and Ministry of Justice, for their assistance in the investigation and effecting the defendant’s extradition, the United States Marshals Service, for their assistance in transporting the defendant to the United States, and the U.S. Department of State Regional Security Officers in Slovenia and the Netherlands, for their assistance in facilitating the defendant’s extradition.   

“Today’s extradition of alleged cybercriminal Djevair Ametovski from Central Europe is the culmination of a seven-year investigation and demonstrates the relentless pursuit by the Secret Service and its international partners to bring cybercriminals to justice.  Multinational cyber investigations require establishing critical partnerships with our international law enforcement partners.  The immeasurable assistance provided to our New York Electronic Crimes Task Force by the Slovenian Authorities in this case illustrates that our investigative reach will continue to expand beyond the borders of the United States,” said Special Agent in Charge Beach of the United States Secret Service New York Field Office.

As detailed in the complaint, Ametovski obtained valuable data from hackers, who stole it from financial institutions and other businesses or from individuals using “phishing” tactics.[1]  Ametovski then sold the data on his website, a fully indexed and searchable website that allowed users to search through databases of stolen data by bank identification number, financial institution, country, state, and card brand to find the precise data that they wished to buy.  Individuals who bought data from the website generally used it to make online purchases and to encode plastic cards with the data and use the cards to withdraw cash at ATMs.  Ametovski used a network of online money exchangers and digital currencies to pay the hackers who fed him data and to receive payments from the website users who bought data in order to conceal all participants’ identities, including his own.  Over the course of the scheme, Ametovski obtained and sold credit and debit card data for more than 181,000 different cards.  In many instances, the data included personal details associated with the account holder, including email address, billing address, phone number, and account holder name.  The charged scheme resulted in millions of dollars in financial losses to thousands of victims around the world. 

Ametovski was arrested in Ljubljana, Slovenia, on January 22, 2014, and was extradited to the United States today.

The charges in the complaint are allegations, and the defendant is presumed innocent unless and until proven guilty.         

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Una Dean, Saritha Komatireddy, and Hilary Jager are in charge of the prosecution.  Substantial assistance was provided by Marcus Busch of the Justice Department’s Office of International Affairs.

 

The Defendant:

DJEVAIR AMETOVSKI
Alias:  Codeshop, Sindrom, Sindromx
Age: 29
Nationality:  Macedonian E.D.N.Y. Docket No. 14 M 058

 

 

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[1] “Phishing” is a common cyber fraud tactic that involves sending an email to a user falsely claiming to be an established legitimate enterprise in an attempt to scam the user into surrendering private information.  In this case, such emails commonly directed users to visit a bogus website where they were asked to update personal information, such as passwords and credit card, social security, and bank account number previously provided to a legitimate organization.

Defendant Allegedly Contributed Funds to Send a Co-Conspirator Overseas to Join ISIL and to Finance the Purchase of a Firearm Once the Co-Conspirator Arrived in Syria

A superseding indictment was unsealed in the Eastern District of New York charging Azizjon Rakhmatov, 28, an Uzbeki national, with conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and conspiring to use a firearm. 

The charges were announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Robert L. Capers of the Eastern District of New York, Assistant Director in Charge Diego G. Rodriguez of the FBI’s New York Field Office, Commissioner William J. Bratton of the New York City Police Department (NYPD) and Special Agent in Charge Angel M. Melendez of U.S. Immigration and Customs Enforcement-Homeland Security Investigations (HSI) New York.

Rakhmatov, who is charged with four others whose arrests and indictments have previously been announced, is scheduled to be arraigned at 2:00 p.m. today before U.S. Magistrate Judge James Orenstein of the Eastern District of New York at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

As alleged in the third superseding indictment and other court filings, the investigation began when Abdurasul Juraboev, one of Rakhmatov’s co-conspirators, came to the attention of law enforcement.  On an Uzbek-language website that propagates ISIL’s ideology, Juraboev posted an offer to engage in an act of martyrdom on U.S. soil on behalf of ISIL, such as killing the President of the United States.  The investigation subsequently revealed that Juraboev and another co-defendant, Akhror Saidakhmetov, planned to travel to Turkey and then to Syria for the purpose of waging violent jihad on behalf of ISIL.  Saidakhmetov was arrested on Feb. 25, 2015, at John F. Kennedy International Airport, where he was attempting to board a flight to Istanbul.  Juraboev previously purchased a plane ticket to travel from New York to Istanbul and was scheduled to leave the United States in March 2015.  Rakhmatov and three other co-defendants – Abror Habibov, Dilkhayot Kasimov and Akmal Zakirov – are charged with funding Saidakhmetov’s efforts to join ISIL.  Juraboev pleaded guilty on Aug. 14, 2015, to conspiring to provide material support to ISIL.

As alleged in the third superseding indictment and other court filings, Rakhmatov helped to fund Saidakhmetov’s efforts to join ISIL.  Specifically, Rakhmatov and Habibov discussed providing their own money to cover Saidakhmetov’s travel expenses and to purchase a firearm for Saidakhmetov once he arrived in Syria.  Rakhmatov also agreed to raise money from others to fund Saidakhmetov’s travel.  In the week leading up to Saidakhmetov’s scheduled departure, Rakhmatov transferred money into Zakirov’s personal bank account, which was intended to facilitate Saidakhmetov’s travel to join ISIL.

If convicted, Rakhmatov faces a maximum sentence of 50 years in prison.  The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

Assistant Attorney General Carlin joined U.S. Attorney Capers in extending his grateful appreciation to the FBI’s Joint Terrorism Task Force, the FBI New Haven Division and the U.S. Attorney’s Office of the District of Connecticut.

The case is being prosecuted by Assistant U.S. Attorneys Alexander A. Solomon, Douglas M. Pravda and Peter W. Baldwin of the Eastern District of New York, with assistance provided by Assistant U.S. Attorney Stephen Reynolds of the District of Connecticut and Trial Attorney Danya Atiyeh of the National Security Division’s Counterterrorism Section.

Rakhmatov Indictment

Earlier today, a superseding indictment was unsealed in federal court in the Eastern District of New York charging Azizjon Rakhmatov with conspiring and attempting to provide material support to the Islamic State of Iraq and the Levant (ISIL), a designated foreign terrorist organization, and conspiring to use a firearm.  The defendant, who is charged with four others whose arrests and indictments have previously been announced, is scheduled to be arraigned at 2:00 p.m. today before United States Magistrate Judge James Orenstein at the U.S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York; John P. Carlin, Assistant Attorney General for National Security; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; William J. Bratton, Commissioner, New York City Police Department (NYPD); and Angel M. Melendez, Special Agent-in-Charge, Homeland Security Investigations (HSI), New York.

As alleged in the third superseding indictment and other court filings, the investigation began when Abdurasul Juraboev, one of Rakhmatov’s co-conspirators, came to the attention of law enforcement.  Juraboev posted on an Uzbek-language website that propagates ISIL’s ideology his offer to engage in an act of martyrdom on U.S. soil on behalf of ISIL, such as killing the President of the United States.  The investigation subsequently revealed that Juraboev and another co-defendant, Akhror Saidakhmetov, planned to travel to Turkey and then to Syria for the purpose of waging violent jihad on behalf of ISIL.  Saidakhmetov was arrested on February 25, 2015, at John F. Kennedy International Airport where he was attempting to board a flight to Istanbul, Turkey.  Juraboev previously purchased a plane ticket to travel from New York to Istanbul and was scheduled to leave the United States in March 2015.  Rakhmatov and three other co-defendants – Abror Habibov, Dilkhayot Kasimov, and Akmal Zakirov – are charged with funding Saidakhmetov’s efforts to join ISIL.  Juraboev pleaded guilty on August 14, 2015, to conspiring to provide material support to ISIL.

As alleged in the third superseding indictment and other court filings, Rakhmatov helped to fund Saidakhmetov’s efforts to join ISIL.  Specifically, Rakhmatov and Habibov discussed providing their own money to cover Saidakhmetov’s travel expenses and to purchase a firearm for Saidakhmetov once he arrived in Syria.  Rakhmatov also agreed to raise money from others to fund Saidakhmetov’s travel.  In the week leading up to Saidakhmetov’s scheduled departure, Rakhmatov transferred money into Zakirov’s personal bank account, which funds were intended to facilitate Saidakhmetov’s travel to join ISIL.

If convicted, Rakhmatov faces a maximum sentence of 50 years in prison.  The charges in the superseding indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being handled by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Alexander A. Solomon, Douglas M. Pravda, and Peter W. Baldwin are in charge of the prosecution, with assistance provided by Assistant United States Attorney Stephen Reynolds of the United States Attorney’s Office for the District of Connecticut and Trial Attorney Danya Atiyeh of the National Security Division’s Counterterrorism Section.

The Defendant:

AZIZJON RAKHMATOV
Age:  28
Nationality: Uzbeki

E.D.N.Y. Docket No. 15-CR-95 (S-3)

BROOKLYN, N.Y. – Earlier today, Gregg R. Mulholland, a dual U.S. and Canadian citizen and secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama, and Belize City, Belize, pleaded guilty to money laundering conspiracy for fraudulently manipulating the stocks of more than 40 U.S. publicly-traded companies and then laundering more than $250 million in profits through at least five offshore law firms.  Pursuant to his plea agreement with the government, Mulholland has agreed to forfeit, among other things, a Dassault-Breguet Falcon 50 aircraft, a Range Rover Defender vehicle, two real estate properties in British Columbia, and funds and securities on deposit at more than a dozen bank and brokerage accounts.  When sentenced, Mulholland faces up to 20 years in prison. 

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Shantelle P. Kitchen, Special Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York (IRS-CI); and Angel M. Melendez, Special Agent-in-Charge, U.S. Immigration and Customs Enforcement’s (ICE), Homeland Security Investigations, New York (HSI).

“Mulholland’s staggering fraud perpetrated on the investing public was built on an elaborate offshore shell game, which included his secret ownership of an offshore brokerage firm.  Through manipulative trading, Mulholland generated profits of more than $250 million and used a corrupt lawyer to launder the proceeds into the United States to pay his fraudulent network of stock promoters and broker-dealers,” stated United States Attorney Capers.  “We are steadfast in our commitment to protect the investing public and will vigorously prosecute those who seek to abuse the financial markets through fraudulent means.” Mr. Capers thanked the Securities and Exchange Commission (SEC), the Department of Justice’s Office of International Affairs (OIA), the Department of State’s Diplomatic Security Service (DSS), and the Financial Industry Regulatory Authority, Inc., Criminal Prosecution Assistance Group (FINRA CPAG) for their cooperation and assistance in the investigation.

“Mulholland pleaded guilty today for his role in a stock manipulation and profit hiding scheme totaling more than $250 million. Making sure our markets are fair to all investors and bringing charges against those who profit illegally remains a top priority for the FBI,” stated FBI Assistant Director-in-Charge Rodriguez.

“This investigation highlights the government’s ability and resolve to combat global money laundering, in this case, the laundering of illicit proceeds from a stock manipulation scheme,” stated IRS-CI Special Agent-in-Charge Kitchen.  “Prospective money launderers should take note of Mr. Mulholland’s conviction and think twice about the consequences of such actions.  The same holds true for individuals who attempt to criminally circumvent IRS reporting requirements regarding foreign accounts, as their actions will attract the attention of IRS-Criminal Investigation.”  

“Laundering more than a quarter of a billion dollars, this defendant used multiple schemes including manipulating the stocks of more than 40 companies in order to line his pockets at the expense of the U.S. financial system.  HSI remains committed to using its unique authorities to arrest those that seek to conceal and launder illicit proceeds, causing harm to our economy,” said Special Agent-in-Charge Melendez.

Between 2010 and 2014, Mulholland controlled a group of individuals (the Mulholland Group) who together devised three interrelated schemes to: (1) induce U.S. investors to purchase stock in various thinly-traded U.S. public companies through fraudulent promotion of the stock, concealment of their ownership interests in the companies, and fraudulent manipulation of artificial price movements and trading volume in the stocks of those companies; (2) circumvent the IRS’s reporting requirements under the Foreign Account Tax Compliance Act (FATCA); and (3) launder the fraudulent proceeds from the stock manipulation schemes to and from the United States through five offshore law firms.  Through these schemes, the Mulholland Group laundered more than $250 million in fraudulent proceeds.

To facilitate the interrelated schemes, the Mulholland Group used shell companies in Belize and Nevis, West Indies, which had nominees at the helm.  This structure was designed to conceal the Mulholland Group’s ownership interest in the stock of U.S. public companies, in violation of U.S. securities laws, and enabled the Mulholland Group to engage in more than 40 “pump and dump” schemes.  For example, this structure enabled the Mulholland Group to manipulate the stock of Cynk Technology Corp, which traded on the U.S. OTC markets under the ticker symbol CYNK.  Using aliases such as “Stamps” and “Charlie Wolf,” Mulholland was intercepted on a court-authorized wiretap on May 15, 2014, admitting to his ownership of “all the free trading” or unrestricted shares of CYNK.  Prior to this conversation between Mulholland and his trader at Legacy, there had been no trading in CYNK stock for 24 trading days.  Over the next two months, the stock of CYNK rose from $0.06 per share to $13.90 per share, a more than $4 billion stock market valuation for a company that had no revenue and no assets.    

Mulholland used the services of a U.S.-based lawyer to launder the more than $250 million generated through his stock manipulation of CYNK and other U.S. companies – directing the fraud proceeds to five law firm accounts and transmitting them back to members of the Mulholland Group and its co-conspirators.  These concealment schemes also enabled Mulholland to evade reporting requirements to the IRS.

Today’s guilty plea took place before United States District Judge I. Leo Glasser. 

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Jacquelyn Kasulis, Winston Paes, and Michael Keilty are in charge of the prosecution.  Assistant United States Attorney Brian Morris of the Office’s Civil Division will be responsible for the forfeiture of assets.

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit www.StopFraud.gov.

The Defendant:

GREGG R. MULHOLLAND
Age:  46
San Juan Capistrano, California
Vancouver, Canada

EDNY Docket No. 14-CR-476 (ILG)

The U.S. District Court for the Eastern District of New York entered a consent decree today that permanently barred eight individuals and entities from operating an alleged international multi-million dollar mail-fraud scheme in the name of alleged psychics Maria Duval and Patrick Guerin.  Pursuant to the consent decree, the defendants were barred from using the U.S. mail to distribute any advertisements, solicitations, or promotional materials on behalf of any psychics, clairvoyants, or astrologers.  The consent decree also enjoined the defendants from using the U.S. mail to distribute materials representing that services or items offered for purchase will increase the recipient’s odds of winning a lottery, will bring the recipient good luck, or will entitle the recipient to receive an inheritance.  The consent decree also authorized the United State Postal Inspection Service to return any money or personal checks sent to the defendants and detained by the Postal Inspection Service.

The following eight international defendants agreed to be bound by a permanent injunction in order to resolve the United States’ civil suit against them: Canadian company 9097-9394 Québec Inc. dba Infogest Direct Marketing (Infogest); Infogest employees Mary Thanos, Daniel Sousse and Philip Lett, all of Quebec, Canada; Hong Kong corporation Destiny Research Center Ltd.; Destiny Research Center President Martin Dettling of Zurich, Switzerland; Patrick Guerin of France; and Maria Duval of France. 

In an amended complaint filed in November 2015, the United States alleges that the defendants operated a mail fraud scheme in which they sent letters purporting to be written by psychics Maria Duval and Patrick Guerin to American consumers through the U.S. mail.  The letters claim that the psychics have had a specific, personalized vision or psychic reading revealing that the recipient of the letter has the opportunity to achieve great wealth, including claims of winning millions in the lottery.  The solicitations urge victims to purchase various products and services in order to ensure that the foreseen good fortune comes to pass.  In reality, the solicitations are identical, mass produced form letters sent to tens of thousands of recipients throughout the United States every month.  Many of the customers who receive the solicitations are vulnerable victims, including the desperate, elderly, and infirm.

The United States alleges that the fraud scheme victimized more than one million Americans, who sent the defendants payments totaling more than $180 million.

“To line their own pockets, the defendants preyed upon the superstition and desperation of millions of vulnerable Americans,” said United States Attorney Robert L. Capers.  “We will use every means at our disposal to protect our citizens from fraudulent schemes like this that target the lonely, the ill, and the elderly.”

“This widespread scam targeted more than one million Americans, many of whom were elderly or in financial distress,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “The Justice Department is committed to stopping such fraud and pursuing all those responsible for lying to vulnerable consumers for their own financial gain.”

The defendants have all agreed to settle the case and be bound by a permanent injunction.  The permanent injunction also bars the defendants from making various claims in advertisements sent through the U.S. mail, including claims that products offered for sale will increase the recipient’s odds of winning the lottery or bring the recipient luck or good fortune.  The permanent injunction further bars the defendants from using or selling lists of consumers who have responded to the Duval and Guerin solicitations.

The United States’ case is being handled by John Vagelatos, Chief of Affirmative Civil Enforcement for the U.S. Attorney’s Office of the Eastern District of New York, and Ann F. Entwistle, Trial Attorney for the Civil Division’s Consumer Protection Branch, in coordination with the U.S. Postal Inspection Service.

For more information about the U.S. Attorney’s Office for the Eastern District of New York, visit its website at https://www.justice.gov/usao-edny.  Additional information about the Consumer Protection Branch and its enforcement efforts may be found at http://www.justice.gov/civil/consumer-protection-branch.

E.D.N.Y. Docket No. 14-CV-6791

Earlier today at the federal courthouse in Brooklyn, New York, Rudell L. Clark Mullings, a former federal correctional officer at the Metropolitan Correctional Center (MCC) in Manhattan, was sentenced to seven years’ imprisonment by United States District Judge Edward R. Korman.  

On February 14, 2015, Mullings was working as a correctional officer at the MCC.  On that day, he was tasked with overseeing a female inmate, who was cleaning the hallways and corridors of the MCC.  Mullings approached the inmate and sexually assaulted her in the corridor.  Thereafter, Mullings returned to the hallway to ensure no security cameras had caught the assault.  A DNA test later confirmed that Mullings had engaged in sex with the victim. 

Mullings pled guilty to sexual abuse of an inmate on November 23, 2015.

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Ronald G. Gardella, Special Agent in Charge, United States Department of Justice, Office of the Inspector General, New York Field Office.

In announcing the sentencing, Mr. Capers extended his grateful appreciation to the Office of the Inspector General.

The government’s case is being prosecuted by Assistant United States Attorney Hiral D. Mehta. 

The Defendant:

RUDELL L. CLARK MULLINGS
Age:  54
Brooklyn, New York

E.D.N.Y. Docket No. 15-CR-538 (ERK)

BROOKLYN, N.Y. – A five-count indictment was unsealed this morning in federal court in Brooklyn, New York, against nine defendants, Jared Mitchell, the Managing Partner of Mitchell & Sullivan Capital LLC; Richard Brown, a registered broker; Christopher Castaldo, the Chief Executive Officer of Stock Traders Press Inc. and the President of Wall Street Buy Sell Hold Inc.; Gerald Cocuzzo, also known as “Gerry,” a registered broker; Naveed Khan, also known as “Nick,” a registered broker; Herschel Knippa III, also known as “Tres,” the owner and Head Trader at Kenai Capital Management LLC; Maroof Miyana, a registered broker; Pranav Patel, a registered broker; and Louis Petrossi, the founder and Chief Executive Officer of the Wealth Research Institute.[1]  The charges include securities fraud, conspiracy to commit securities fraud, wire fraud, money laundering and making a false statement to law enforcement officials in connection with the fraudulent market manipulation of ForceField Energy Inc. (ForceField), a publicly-traded company listed on the NASDAQ under the ticker symbol “FNRG.”

Mitchell, Brown, Castaldo and Khan will be arraigned later today before Magistrate Judge Vera M. Scanlon, at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.  Cocuzzo and Miyana’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 701 Clematis Street, West Palm Beach, Florida.  Patel’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 299 East Broward Boulevard, Fort Lauderdale, Florida.  Knippa’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 1100 Commerce Street, Dallas, Texas.  Petrossi’s initial appearance for removal proceedings to the Eastern District of New York is scheduled for this afternoon at the United States Courthouse, 400 South Virginia Street, Reno, Nevada.

The indictment was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

“As alleged, the defendants and their network of registered brokers and stock promoters designed an elaborate but fraudulent scheme built on lies, kickbacks and manipulated trading activity to defraud the securities markets, the investing public and their clients.  They took a company with essentially no business operations and little revenue and deceived the market and their clients into believing it was worth hundreds of millions of dollars through a dizzying round of unauthorized trades and deceptive promotions.  In the end, the deceived investors were left holding the empty bag,” stated United States Attorney Capers.  “Today’s nine arrests, across four states, reflect the scope of this fraud and our commitment to aggressively locate and bring to justice those who view the financial markets as a platform to fraudulently enrich themselves.”  Mr. Capers expressed his appreciation to the FBI, the agency that led the investigation, and the United States Securities and Exchange Commission, New York Regional Office, for their significant cooperation and assistance in the investigation.

“As alleged, each of the defendants played a role in their scheme to defraud investors of ForceField Energy by using their positions as a stock promoter, brokers, or investor relations to push stock.  The scheme ended up costing investors approximately $131 million in losses.  The FBI will continue to work with our partners in an effort at ensuring that our financial markets are legal, fair, and equitable,” stated FBI Assistant Director-in-Charge Rodriguez.

As alleged in the indictment and other court filings, between December 2009 and April 2015, the defendants, together with others, engaged in a scheme to defraud investors in ForceField, a purported worldwide distributor and provider of LED lighting products and solutions, by artificially controlling the price and volume of traded shares of ForceField  through, among other means: (1) using nominees to purchase and sell ForceField stock without disclosing this information to investors and potential investors; (2) orchestrating the trading of ForceField stock to create the appearance of genuine trading volume and interest in the stock; and (3) concealing payments to stock promoters and broker dealers who promoted and sold ForceField stock to investors and potential investors while claiming to be independent of the company.  The defendants’ fraudulent scheme caused a loss of approximately $131 million to the investing public. 

The Corrupt Brokers

In October 2014, a ForceField executive hired Mitchell to distribute kickbacks to a network of allegedly corrupt registered broker dealers, including Brown, Cocuzzo, Khan, Miyana, and Patel, in exchange for purchasing ForceField stock in their clients’ brokerage accounts.  Using offshore entities and bank accounts, ForceField paid Mitchell a ten-percent commission, or kickback, for purchases of ForceField stock generated by the corrupt brokers.  Mitchell then shared the ten-percent commission with those who had stuffed their clients’ brokerage accounts with ForceField stock.  Mitchell, the corrupt brokers and ForceField did not disclose to the brokers’ clients the ten-percent kickbacks the brokers were receiving for purchasing ForceField stock.

Mitchell and the corrupt brokers concealed their participation in the fraudulent scheme by using prepaid, disposable cellular telephones and encrypted, content-expiring messaging applications to communicate with each other.  Mitchell, who boasted that he was the “brown bag man,” also attempted to conceal his payment of commissions to the corrupt brokers by withdrawing large sums of money from his bank account and paying the brokers in cash. 

Between October 2014 and April 2015 alone, Mitchell and the corrupt brokers conned the brokers’ clients into purchasing more than 425,000 shares of ForceField at a cost of more than $3 million.

The Corrupt Promoters

Throughout its existence, ForceField conducted a series of private placements that raised more than $19.7 million from investors.  Unbeknownst to the investing public, a ForceField executive was paying ten-percent kickbacks to a group of allegedly corrupt stock promoters, including Castaldo, Knippa, and Petrossi, to promote ForceField and induce investors to purchase ForceField stock on public exchanges or enter into private stock purchase agreements with the company.  The corrupt promoters induced many of these unwitting investors to invest in ForceField at investor conferences or, in Knippa’s case, by touting ForceField during television appearances.

For example, when Knippa appeared on “Varney & Co.,” a financial news show on the Fox Business channel, the host of the show asked Knippa whether he had a stock recommendation.  In response, Knippa recommended ForceField, and spoke about the company’s business model.  Varney asked Knippa whether he owned ForceField stock, and Knippa responded, “You bet I do.  I put my money where my mouth is.”  Contrary to his assertion, Knippa did not, at the time, own ForceField stock.  Additionally, during this appearance, Knippa failed to disclose that he was being paid kickbacks to promote ForceField.

During the course of this fraudulent scheme, the corrupt promoters duped more than 100 investors into purchasing more than $6.2 million in ForceField stock.

*          *          *

The wire fraud conspiracy with which all defendants are charged carries a maximum potential penalty of 20 years in prison and a $250,000 fine, or twice the gain or loss from the offense.  The securities fraud conspiracy count with which all defendants are charged carries a maximum potential penalty of five years in prison and a $250,000 fine, or twice the gain or loss from the offense.  The money laundering conspiracy count with which all defendants are charged carries a maximum potential penalty of 20 years in prison and a $500,000 fine, or twice the value of the funds involved in the illegal transfers.  The substantive securities fraud count with which all defendants are charged carries a maximum potential penalty of 20 years in prison and a $5 million fine, or twice the gain or loss from the offense.  The false statement count with which Mitchell is charged carries a maximum potential penalty of 5 years in prison and a $250,000 fine.

The government’s case is being prosecuted by the Office’s Business and Securities Fraud Section.  Assistant United States Attorneys Jacquelyn Kasulis and Christopher Nasson are in charge of the prosecution.

*          *          *

The charges were brought in connection with the President’s Financial Fraud Enforcement Task Force.  The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes.  With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud.  Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations.  Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants.  For more information on the task force, please visit ww.StopFraud.gov.

The Defendants:

JARED MITCHELL
Age:  34
New York, New York

RICHARD BROWN
Age:  37
Huntington, New York

CHRISTOPHER CASTALDO
Age:  44
Glen Head, New York

GERALD COCUZZO
Age:  37
Delray Beach, Florida

NAVEED KHAN
Age:  33
Staten Island, New York

HERSCHEL KNIPPA III
Age:  45
Dallas, Texas

MAROOF MIYANA
Age:  35
Boca Raton, Florida

PRANAV PATEL
Age:  35
Tamarac, Florida

LOUIS PETROSSI
Age:  75
Reno, Nevada

EDNY Docket No. 16-CR-234 (NGG)

 

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            [1] The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

Today in Brooklyn federal court, Ringo Delcid, a member of the violent Predator Set street gang operating primarily in the East Flatbush neighborhood of Brooklyn, was sentenced to 130 months of imprisonment for conspiring to commit two Hobbs Act robberies and for the use of a firearm in connection with one of those robberies.  Last month, two other members of the gang were also sentenced for their roles in these crimes:  Steele was sentenced to 130 months’ imprisonment for his participation in both robberies, and Hall was sentenced to 96 months’ imprisonment for his participation in one of those robberies.  All three defendants were convicted following their previously-entered guilty pleas. 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office; and William J. Bratton, Commissioner, New York City Police Department (NYPD).

The convictions resulted from a series of police impersonation robberies committed in 2013.  On January 16, 2013, Steele and Delcid committed a home invasion robbery of a narcotics trafficker in Brooklyn.  Posing as undercover police officers, the defendants gained access to the residence and proceeded to tie up the trafficker’s girlfriend and twelve-year-old son and ransack the apartment.  On July 10, 2013, Steele, Hall, Delcid, and others attempted to rob another narcotics trafficker by carrying out a traffic stop while posing as undercover police officers, complete with a rental car modified to look like a police car.  The robbery was thwarted when real NYPD officers arrived at the scene and the defendants fled. 

At a hearing on April 14, 2016, U.S. District Judge I. Leo Glasser found that Steele and Hall also conspired to commit a September 27, 2014, armed robbery in which the victim was shot in the leg after he withdrew money from a check-cashing establishment in East Flatbush.  The evidence at the hearing established that Steele and Delcid had accumulated an arsenal of weapons in a storage unit in Brooklyn, including three firearms, hundreds of rounds of ammunition, and three homemade silencers, all of which was seized by law enforcement.

“The defendants’ crimes were carefully planned, brazenly executed, and demonstrated a complete disregard for the safety for their victims and the community,” stated United States Attorney Capers.  “By impersonating police officers, the defendants took advantage of their victims’ trust in law enforcement; their actions also undermined the operation of legitimate law enforcement officers.  The sentences imposed appropriately reflect the seriousness of their crimes and demonstrate our commitment to keeping our neighborhoods safe.”  Mr. Capers expressed his grateful appreciation to the FBI’s Violent Crimes squad and the NYPD’s Internal Affairs Division for their cooperation and assistance in the investigation.

FBI Assistant Director-in-Charge Rodriguez stated, “Delcid not only intruded on a residence but he also intruded on the trust the public has with police when he and his coconspirators posed as police officers to commit violent crimes.  Serious offenses like this warrant serious sentences and today’s sentencing of Delcid is no exception.”

“These gang members committed gunpoint robberies, violating the public’s trust by impersonating police officers and, in one case, preying upon a woman and child,” said Police Commissioner Bratton.  “I would like to thank the members of the NYPD, the FBI, and the U.S. Attorney’s office whose work has led to lengthy prison sentences for the defendants.”

The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Alixandra Smith and David Pitluck are in charge of the prosecution. 

The Defendants:

BENJAMIN HALL
Age: 21
Brooklyn, New York

RINGO DELCID
AGE: 27
BROOKLYN, NEW YORK

KASAGAMA STEELE
Age: 30
Brooklyn, New York

E.D.N.Y. Docket No. 14-CR-576 (ILG)

A criminal complaint was unsealed today in federal court in the Eastern District of New York charging five former employees of Aircraft Service International Group (ASIG) at Terminal One of John F. Kennedy International Airport (JFK Airport), with conspiracy to steal United States Mail.  Rickash Gobin, Fitzroy Ragbeer, Franklin Beresford, Pedro Lopez, Jr., and Nick Sadler, also known as “Nickeya Sadler” and “Nicky Sadler,” were arrested earlier today and their initial appearances are scheduled for this afternoon before United States Magistrate Judge Vera M. Scanlon at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York.

The charges were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Phillip R. Bartlett, Postal Inspector in Charge of the United States Postal Inspection Service’s New York Field Office.

As detailed in the criminal complaint, in a conspiracy spanning over four years, former ASIG cargo handlers Ragbeer, Beresford, Lopez, Jr., and Sadler agreed to steal mail from international flights arriving at and departing from Terminal One of JFK Airport, including Japan Airlines, Austrian Airlines, and LOT Polish Airlines flights.  The cargo handlers targeted mail they believed to contain foreign currency, including Japanese Yen and Euros, and then exchanged the foreign currency at currency exchange businesses at JFK Airport, and at other financial institutions. 

Gobin, a former manager for ASIG, allegedly not only failed to stop the theft of mail, but actively promoted it by assigning cargo handlers to flights where they could steal mail and demanding kickbacks of stolen currency in exchange.

“As charged, these cargo handlers abused their access to sensitive areas of JFK Airport to steal foreign currency from the mail and were aided by a manager who actively promoted their criminal conduct,” stated United States Attorney Capers. “Today’s arrests will serve as a warning that federal law enforcement authorities are committed to protecting the integrity of the mail and will hold accountable those that steal mail or attempt to profit from the theft of mail.” 

“These defendants and their supervisor were entrusted with the security of the mail.  They abused that trust when they stole foreign currency from the mail, violating the sanctity of the seal.  Postal Inspectors and their law enforcement partners vigorously investigate and bring to justice those who steal US Mail,” stated Postal Inspector in Charge Bartlett. 

Previously, on August 18, 2015, postal inspectors arrested six other defendants, including three former ASIG cargo handlers at Terminal One of JFK Airport, on charges that they conspired to steal from the mail and launder foreign currency.  The case against those six defendants, captioned United States v. Janvier, et al., Docket No. 15-CR-461 (ARR), is pending before United States District Judge Allyne R. Ross.

The charges in the complaints are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by Assistant United States Attorney Ian C. Richardson.

The Defendants:

RICKASH GOBIN
Age:  41
Queens, New York

FITZROY RAGBEER
Age:  58
Inwood, New York

FRANKLIN BERESFORD
Age:  26
Brooklyn, New York

PEDRO LOPEZ, JR.
Age:  34
Brooklyn, New York

NICK SADLER, also known as “Nickeya Sadler” and “Nicky Sadler”
Age:  35
Rockaway Park, New York

E.D.N.Y. Docket No. 16-M-392

ImageStore US Inc. and Mambate USA Inc., doing business as AGPTEK (collectively “AGPTEK”), an Internet-based vendor of a wide variety of merchandise, including consumer electronics, and their shareholder and principal, Charlie Wang, have entered into a settlement agreement with the United States in which they have agreed to pay $1,049,635.82 to resolve civil allegations that they failed to pay postage on large amounts of mail sent through the United States Postal Service.       

The settlement was announced today by Robert L. Capers, the United States Attorney for the Eastern District of New York, and Philip R. Bartlett, the Inspector-in-Charge of the New York Division of the United States Postal Inspection Service.

The settlement resolved a multi-year investigation into AGPTEK’s mailings to consumers.  AGPTEK sells consumer electronic accessories and replacement parts such as cell phone cases, digital camera batteries, and laptop AC adapters through multiple websites.  The United States alleged that from June 2005 to May 2010, AGPTEK mailed over two hundred thousand items to customers either without postage or without sufficient postage.  AGPTEK would stamp the packages with an unauthorized postal permit number that was not associated with any credit card or billing account. 

In reaching this settlement, AGPTEK and Mr. Wang accepted responsibility for failing to pay sufficient postage during the five year period.

“By failing to pay proper postage, AGPTEK short-changed the Postal Service of funds it depends on from customers to fulfill its mission,” stated U.S. Attorney Capers.  “This settlement reflects the commitment of this Office to root out wrongdoing against the Postal Service and ensure it is able to continue providing valuable services to all of its customers.” 

“The Postal Inspection Service will vigorously pursue individuals who underpay the Postal Service, and we appreciate U.S. Attorney Capers’ strong stance against those who seek to take advantage of the Postal Service,” said Inspector-in-Charge Philip R. Bartlett.

This case was investigated by the United States Postal Inspection Service and handled by Assistant U.S. Attorney Rachel G. Balaban.        

Alhassane Ould Mohamed, aka Cheibani, 46, a citizen of Mali, was sentenced to 25 years in prison in the Eastern District of New York for conspiring to murder a U.S. diplomat stationed in Niamey, Niger, in December 2000.

The sentence was announced by Assistant Attorney General for National Security John P. Carlin, U.S. Attorney Robert L. Capers of the Eastern District of New York and Assistant Director in Charge Diego Rodriguez of the FBI New York Field Office.

According to court filings and facts presented during the plea proceeding, in the early morning hours of Dec. 23, 2000, Mohamed and a co-conspirator accosted a group of employees of the U.S. Embassy in Niger as they left a restaurant in Niamey.  Carrying a pistol and an AK-47 assault rifle, the two men approached U.S. diplomat William Bultemeier as he was about to enter his car, a white sport-utility vehicle bearing diplomatic license plates clearly indicating that it belonged to the U.S. Embassy.  After demanding that Bultemeier turn over the keys to the diplomatic vehicle, the defendant and his co-conspirator shot Bultemeier and Staff Sergeant Christopher McNeely, the Marine Detachment Commander for the U.S. Embassy in Niger at the time, who had run to Bultemeier’s aid.  Mohamed and his fellow assailant then drove away in the U.S. Embassy vehicle.

Bultemeier died of the injuries inflicted by the gunshot wounds.  Staff Sergeant McNeely survived the shooting and later retired from the Marine Corps as a Master Sergeant.

“The defendant and his confederate murdered U.S. diplomat William Bultemeier in cold blood and seriously injured U.S. Marine Staff Sergeant Christopher McNeely, who bravely risked his life to attempt to save his colleague,” said U.S. Attorney Capers.  “Although nothing can undo the pain caused by the defendant’s violent actions, we hope the victims’ families can take some measure of solace in knowing that the defendant is being held accountable for the senseless murder of Mr. Bultemeier and the attack on Staff Sergeant McNeely.  The United States takes the protection of its employees stationed overseas very seriously and will continue to work tirelessly to bring those who harm our diplomats to justice.”

“Over the past 16 years, Cheibani evaded full accountability for his murderous actions in taking the life of a U.S. Diplomat,” said Assistant Director in Charge Rodriguez.  “U.S. employees working overseas understand there are certain risks in representing their government in foreign territories; however, a death sentence should not be one of them.  We are extremely grateful to the governments of Niger and Mali, in helping U.S. authorities seek justice for Cheibani’s crime.  FBI New York’s Joint Terrorism Task Force, along with the U.S. Attorney’s Office, conducted a thorough investigation and collected the necessary evidence to substantiate today’s sentence.  Our condolences to the family of Mr. Bultemeier and the families of all crime victims.  FBINY will continue to work, day and night, to hold those accountable for their crimes, and prevent acts of terror against our citizens, both domestically and abroad.”

The sentencing took place before U.S. District Judge William F. Kuntz II of the Eastern District of New York.

Assistant Attorney General Carlin joined U.S. Attorney Capers in expressing their sincere gratitude to the members of the FBI’s Joint Terrorism Task Force for their thorough investigation, to the Department of State’s Diplomatic Security Service for the assistance they provided and to the governments of Niger and Mali for their substantial assistance and cooperation in connection with this investigation.  The Department of Justice’s Office of International Affairs also provided significant assistance.  The case is being prosecuted by Assistant U.S. Attorneys Zainab Ahmad, Margaret Lee and Melody Wells of the Eastern District of New York with assistance provided by Trial Attorney Jennifer Levy of the National Security Division’s Counterterrorism Section.  

Earlier today, Alhassane Ould Mohamed, also known as “Cheibani,” a citizen of Mali, was sentenced to 25 years’ imprisonment at the federal courthouse in Brooklyn, New York, for conspiring to murder a United States diplomat stationed in Niamey, Niger, in December 2000. 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation.

According to court filings and facts presented during the guilty plea proceeding, in the early morning hours of December 23, 2000, the defendant and a co-conspirator accosted a group of employees of the United States Embassy in Niger as they left a restaurant in Niamey, Niger.  Carrying a pistol and an AK-47 assault rifle, the two men approached Department of Defense official William Bultemeier as he was about to enter his car, a white sport-utility vehicle bearing diplomatic license plates clearly indicating that it belonged to the United States Embassy.  After demanding that Mr. Bultemeier turn over the keys to the diplomatic vehicle, the defendant and his co-conspirator shot Mr. Bultemeier and Staff Sergeant Christopher McNeely, the Marine Detachment Commander for the United States Embassy in Niger at the time, who had run to Mr. Bultemeier’s aid.  The defendant and his fellow assailant then drove away in the United States Embassy vehicle.

Mr. Bultemeier died of the injuries inflicted by the gunshot wounds.  Staff Sergeant McNeely survived the shooting and later retired from the Marine Corps as a Master Sergeant.

“The defendant and his confederate murdered U.S. diplomat William Bultemeier in cold blood and seriously injured U.S. Marine Staff Sergeant Christopher McNeely, who bravely risked his life to attempt to save his colleague,” stated United States Attorney Capers.  “Although nothing can undo the pain caused by the defendant’s violent actions, we hope the victims’ families can take some measure of solace in knowing that the defendant is being held accountable for the senseless murder of Mr. Bultemeier and the attack on Staff Sergeant McNeely.  The United States takes the protection of its employees stationed overseas very seriously and will continue to work tirelessly to bring those who harm our diplomats to justice.”  Mr. Capers expressed his sincere gratitude to the members of the FBI’s Joint Terrorism Task Force for their thorough investigation, to the Department of State’s Diplomatic Security Service for the assistance they provided, and to the governments of Niger and Mali for their substantial assistance and cooperation in connection with the investigation.

FBI Assistant Director-in-Charge Rodriguez stated, “Over the past 16 years, Cheibani evaded full accountability for his murderous actions in taking the life of a U.S. Diplomat.  U.S. employees working overseas understand there are certain risks in representing their government in foreign territories; however, a death sentence should not be one of them.  We are extremely grateful to the governments of Niger and Mali, in helping U.S. authorities seek justice for Cheibani’s crime.  FBI New York’s Joint Terrorism Task Force, along with the U.S. Attorney’s Office, conducted a thorough investigation and collected the necessary evidence to substantiate today’s sentence.  Our condolences to the family of Mr. Bultemeier and the families of all crime victims.  FBINY will continue to work, day and night, to hold those accountable for their crimes, and prevent acts of terror against our citizens, both domestically and abroad.” 

Today’s sentencing took place before United States District Judge William F. Kuntz, II.

The government’s case is being prosecuted by the Office’s National Security & Cybercrime Section.  Assistant United States Attorneys Zainab Ahmad, Margaret Lee, and Melody Wells are in charge of the prosecution, with assistance provided by the Trial Attorney Jennifer Levy of the Justice Department’s Counterterrorism Section and by the Justice Department’s Office of International Affairs.

The Defendant:

ALHASSANE OULD MOHAMED
Age:  46

E.D.N.Y. Docket No. 13-527 (WFK)

Yesterday, following two and a half weeks of trial, a federal jury in Brooklyn, New York, returned a guilty verdict against Redinel Dervishaj, on Hobbs Act extortion conspiracy, attempted extortion, threatening/committing physical violence in furtherance of an extortion plan, and related charges involving brandishing firearms.  The charges arose out of the defendant’s schemes to extort three small business owners in Queens, New York.  When sentenced by United States District Judge Eric N. Vitaliano, the defendant faces a maximum sentence of life imprisonment and a mandatory minimum of 57 years in prison.  Co-defendants Besnik Llakatura, a police officer with the New York City Police Department during the charged crimes, and Denis Nikolla previously pleaded guilty in this case and are awaiting sentencing. 

The verdict was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office, and William J. Bratton, Commissioner, New York Police Department.

“Through fear, intimidation and threats of violence, Dervishaj and his co-defendants demanded payment from local business owners in Astoria, Queens, for so-called protection,” stated United States Attorney Capers.  “When the victims refused to pay, the defendants escalated their efforts to secure payment, brazenly threatening the business owners with firearms.  Yesterday, Dervishaj was held accountable for the harm he caused and the fear he engendered.” 

“Dervishaj’s tactics of fear, intimidation, and violence will work no more.  Yesterday, he was convicted by a jury on charges relating to his role in extorting small business owners in Queens for payments for so-called protective services.  The FBI thanks our law enforcement partners at the U.S. Attorney’s Office in the Eastern District of New York for their work on this case,” stated FBI Assistant Director-in-Charge Rodriguez. 

“The defendant faces a minimum sentence of more than a half-century in prison, which should serve to discourage others from attempting to use intimidation and threats of violence to bilk legitimate businesspeople,” stated New York Police Commissioner Bratton. 

As proven at trial, between May and November 2013, Dervishaj and his co-defendants conspired and attempted to extort a Queens restaurant owner, demanding regular payments in exchange for so-called protection.  The extortion began shortly after the victim opened a restaurant in Astoria when he was visited by Dervishaj and told that he had opened a business in “our neighborhood.”  As a result, the restaurant owner was required to pay Dervishaj $4,000 per month.  He then sought help from Besnik Llakatura, whom the restaurant owner believed was his friend.  Unbeknownst to him, Llakatura, an NYPD officer in Staten Island since 2006, was conspiring with Dervishaj in the extortion and actively discouraged the restaurant owner from going to the police.  Llakatura sought to persuade the victim that he had no choice but to make the demanded payments, warning him that Dervishaj and his associates would physically harm him if he did not pay.  When the victim resisted, at Dervishaj’s direction co-conspirator Denis Nikolla threatened the victim with physical violence and chased him at gunpoint down a street in Queens.  Over the course of five months, each of the three defendants took turns collecting monthly payments from the victim, ultimately collecting $24,000 in so-called protection money. 

Between April 2012 and November 2013, Dervishaj and Nikolla also conspired and attempted to extort the proceeds of two nightclubs located in Queens, New York, and used a firearm in their efforts to do so.  After the nightclub owner failed to make the demanded payments, on September 20, 2012, Dervishaj and Nikolla confronted the victim at a bar in Astoria; Nikolla took a firearm from Dervishaj’s waistband and pressed it to the victim’s ribs, threatening to beat him in front of his wife and children and, threatening to beat his wife and children in front of him.

Finally, during 2013, Dervishaj and his co-defendants conspired and attempted to extort a proprietor of two social clubs in Astoria.  After the initial extortion demand, the proprietor refused to make the payments and ceased going to his social clubs out of fear for his safety.  Thereafter, the defendants attempted to locate the proprietor and threaten him.  In one instance, Dervishaj threatened and repeatedly punched a friend of the victim, while a co-conspirator pulled a gun on him.  The victim ultimately fled the country for a period of time to avoid the defendants’ threats.   

The government’s case is being prosecuted by the Office’s Organized Crime and Gangs Section.  Assistant United States Attorneys Nadia Shihata and Patrick Hein are in charge of the prosecution.

The Defendant:

REDINEL DERVISHAJ
Age: 40
Queens, New York

E.D.N.Y. Docket No. 13-CR-668 (ENV)

ROBERT L. CAPERS and PREET BHARARA, the United States Attorneys for the Eastern and Southern Districts of New York, respectively, announced today that special telephone numbers have been set up to receive complaints of possible violations of federal election laws relating to the upcoming primary elections in New York City and other counties in their districts. 

The United States Attorneys said that their Offices will be available to receive complaints at the following numbers on Tuesday, April 19, 2016:

(718) 254-6323                       (for Brooklyn, Queens, Staten Island, Nassau and Suffolk counties)

(212) 637-0840                       (for Manhattan, Bronx, Dutchess, Orange, Putnam, Rockland,

                                                    Sullivan and Westchester counties)

In addition, complaints of possible violations of federal election laws may be made directly to the Federal Bureau of Investigation (FBI) at (212) 384-1000.

Spokespeople for the United States Attorneys said that the enforcement of federal laws protecting the rights of all eligible persons to vote for the candidates of their choice is a high priority of the Department of Justice.

It is unlawful under federal law to deny or abridge anyone’s right to vote because of race, color or national origin.  Federal laws also require local election authorities to make voting accessible to disabled and elderly voters.  Voters who require assistance because of blindness, disability or inability to read and write have the right to receive such assistance from a person of their own choosing.  In counties with substantial numbers of non-English speaking voters, federal laws prohibit the denial or abridgement of a voter’s ability to participate in the election process in certain languages other than English (i.e., Spanish, Chinese, Korean).      

In addition, certain activities designed to subvert the integrity of the election process are federal crimes.  It is a federal crime, for example, to deprive citizens of their right to fair elections or to conspire to do so.  Specific election laws also make it a crime to bribe or intimidate voters, to cause ballots to be cast fraudulently in the names of individuals who did not vote (“ballot stuffing”), to vote more than once, or to alter or falsely report the vote count.  It can also be a federal offense to challenge qualified voters without cause and in bad faith or to harass persons seeking to vote for the purpose of discouraging their vote.

The Offices of the United States Attorneys said that the ability of federal law enforcement authorities to detect and eliminate improper restrictions on voting rights and to prosecute election fraud depends to a large extent on the watchfulness and cooperation of the voters.  It is therefore imperative that those who have been asked to participate in illegal election practices, who have been the subject of such practices, who have observed such practices, or who have information bearing on such practices, make that information known promptly to the FBI or the United States Attorneys at the telephone numbers listed above.

The United States Attorneys also noted that the following additional telephone numbers are available on April 19 for citizens to call for routine inquiries, such as where to vote or how late the polls are open, or to register complaints that may concern violations of New York State election laws:

IN NEW YORK CITY

City Board of Elections

Main Office                (212) 487-5300

                                      (212) 868-3692

Bronx                         (718) 299-9017

Brooklyn                    (718) 797-8800

Manhattan                  (212) 886-2100

Queens                       (718) 730-6730

Staten Island               (718) 876-0079

 

IN COUNTIES OUTSIDE NEW YORK CITY

County Boards of Elections

Dutchess                     (845) 486-2473

Nassau                        (516) 571-2411

Orange                        (845) 291-2444

Putnam                        (845) 278-6970

Rockland                     (845) 638-5172

Suffolk                         (631) 852-4500

Sullivan                       (845) 794-3000

Westchester                (914) 995-5700

Assistant United States Attorney Catherine M. Mirabile is responsible for overseeing the handling of complaints of voting rights abuses and election fraud for the Eastern District of   New York.

Assistant United States Attorney David J. Kennedy is responsible for overseeing the handling of complaints of voting rights abuses and election fraud for the Southern District of New York.

Earlier today at the federal courthouse in Central Islip, New York, Rene Mendez Mejia, also known as “Zorro,” a member of La Mara Salvatrucha, also known as the MS-13 street gang, was sentenced to 45 years in prison by United States District Judge Joseph F. Bianco. 

As established in prior filings, court proceedings, and sentencing memoranda, Mejia and two other MS-13 members, Adalberto Ariel Guzman and Juan Garcia, shot and killed 19-year-old Vanessa Argueta and her two-year-old son, Diego Torres, in Central Islip, New York, on February 5, 2010, after luring them to a secluded wooded area.  Mejia and Garcia shot Argueta in the head and chest, respectively, and Guzman shot Torres twice in the head.  Mejia and other MS-13 members, including MS-13 leader, Heriberto Martinez, Guzman, and Garcia had plotted to kill Argueta because they believed she had disrespected the MS-13 by sending rival gang members to attack Garcia. 

After committing the murders, Mejia and his co-conspirators fled to El Salvador.  Guzman and Mejia were arrested in May 2010 when they returned to the United States, but Garcia remained a fugitive for four years until March 2014, when, after being placed on the FBI’s Ten Most Wanted Fugitives List, he surrendered to law enforcement authorities in Nicaragua, waived extradition, and was returned to the United States for prosecution.  Mejia pled guilty on June 15, 2011.

The sentencing was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Diego Rodriguez, Assistant Director-in-Charge, FBI, New York Field Office, and Timothy Sini, Commissioner, Suffolk County Police Department.

“Mejia and his fellow MS-13 members brutally and senselessly executed a young woman and her two-year-old child.  While nothing can reverse this tragedy, we hope that today’s sentence and the convictions and sentencings of Mejia’s co-conspirators have brought the victims’ families some measure of justice and comfort,” stated United States Attorney.  “My Office and our law enforcement partners will continue to be vigilant and aggressively prosecute the MS-13 and other criminal organizations who unleash violence on our communities.”  United States Attorney Capers expressed his sincere gratitude to the members of the FBI’s Long Island Gang Task Force for their tenacious investigation and unwavering commitment to bring Mejia and his co-conspirators to justice for the Argueta and Torres murders.

“As the last defendant is sentenced for the brutal murders of a young woman and her toddler son by MS-13 gang members, we hope the victims’ family can finally feel justice has been served.  The FBI is committed to working with our partners to not only root-out gangs in our communities but also bring their crimes to justice no matter how long it takes,” said FBI Assistant Director-in-Charge Rodriguez. 

“This prosecution exemplifies the ruthless and senseless violence committed at the hands of MS-13 gang members, which threatens the very fabric of our communities.  The Suffolk County Police Department will continue to aggressively work with our law enforcement partners to bring these violent criminals to justice,” stated Commissioner Sini.

Mejia’s three co-conspirators, Martinez, Guzman, and Garcia were also arrested and indicted in connection with the Argueta and Torres murders.  Martinez was convicted in March 2013, following a six-week trial, in connection with the Argueta murder, as well as the March 6, 2010, murder of Nestor Moreno in Hempstead, New York, and the March 17, 2010 murder of Mario Alberto Canton Quijada in Far Rockaway, New York, and later sentenced to life in prison, plus 60 years.  Guzman was convicted on charges relating to the Argueta and Torres murders in September 2013, following a three-week trial, and later sentenced to life in prison, plus 35 years.  Garcia pled guilty and was sentenced to life in prison for his role in the Argueta and Torres murders. 

The convictions of Mejia and his co-defendants are the latest in a series of federal prosecutions by the United States Attorney’s Office for the Eastern District of New York targeting members of the MS-13, a violent international criminal organization.  The MS-13’s leadership is based in El Salvador and Honduras, but the gang has thousands of members across the United States, comprised primarily of immigrants from Central America.  With numerous branches, or cliques, the MS-13 is the largest and most violent street gang on Long Island.  Since 2003, hundreds of MS-13 members, including dozens of clique leaders, have been convicted on federal felony charges in this district.  A majority of those MS-13 members have been convicted on federal racketeering charges for participating in murders, attempted murders, and assaults.  Since 2010 alone, this Office has obtained indictments charging MS-13 members with carrying out more than 30 murders, and has convicted dozens of MS-13 leaders and members in connection with those murders.  These prosecutions are the product of investigations led by the FBI’s Long Island Gang Task Force, comprising agents and officers of the FBI, Nassau County Police Department, Nassau County Sheriff’s Department, Suffolk County Probation, Suffolk County Sheriff’s Department, Rockville Centre Police Department, and Suffolk County Police Department.

The government’s case is being prosecuted by Assistant United States Attorneys John J. Durham and Raymond A. Tierney from the Office’s Long Island Criminal Division.

The Defendant:

RENE MENDEZ MEJIA
Age:  22
East Patchogue, New York

E.D.N.Y. Docket No. 10-CR-074 (JFB)

Earlier today, Jhon Jairo Hincapie-Ramirez, a citizen of Colombia, was arraigned at the federal courthouse in Brooklyn, New York, for his alleged role in an international money laundering organization that brokered financial transactions designed to conceal the source of illegal narcotics trafficking by using the Chinese and Hong Kong financial system and the shipment of counterfeit goods around the world to launder over $5 billion for drug cartels based in Mexico and Colombia.[1]  Hincapie-Ramirez was arrested in Colombia in August 2015, on a provisional arrest warrant issued from the Eastern District of New York, and was extradited to the United States on April 14, 2016. 

The arraignment was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.

As alleged in the superseding indictment, the investigation determined that from approximately January 1, 2004 through December 31, 2014, members of the organization conspired to carryout trade-based money laundering activities in China, Colombia, Panama, the United States, Spain, Ecuador, Venezuela, and elsewhere.  The group was led by Colombian nationals based in Guangzhou, China (the Guangzhou Enterprise).  The Guangzhou Enterprise laundered money through bank accounts in Hong Kong and China on behalf of drug trafficking organizations in Mexico and Colombia to fund purchases of counterfeit goods in China, which were then shipped to Colombia and elsewhere for resale. 

The Guangzhou Enterprise typically paid Colombian pesos to the drug traffickers in exchange for their U.S. dollar proceeds of drug trafficking at a heavily discounted exchange rate, which reflected the risks incurred by the money brokers.  The Enterprise then located Colombian or other South American customers – usually businesses – that needed U.S. dollars to pay for imported goods or services.  They then sold the U.S. dollars to those customers, who used the money to purchase goods and services in China for resale. 

United States Attorney Capers thanked the Drug Enforcement Administration, New York Division; Internal Revenue Service-Criminal Investigation, New York Field Office; the Department of Justice, Office of International Affairs; DEA Dallas Field Office; New York City Police Department; New York State Police; DEA Beijing Country Office; DEA Hong Kong Country Office; IRS Beijing Country Office; IRS Hong Kong Country Office; the Financial Investigations Group of the Hong Kong Customs and Excise Department; and the Chinese Ministry of Public Security for their assistance in this case.

The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Tyler J. Smith and Ameet B. Kabrawala are in charge of the prosecution.

The Defendant:                                            

JHON JAIRO HINCAPIE-RAMIREZ
Alias:  El Profe
Age: 55
Nationality:  Colombian

E.D.N.Y. Docket No. 15-CR-81 (CBA)

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[1]  The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

Earlier today in federal court in Brooklyn, Alfredo Hawit, a former FIFA vice president and executive committee member, the former president of CONCACAF, and the former president and general secretary of the Honduran soccer federation (FENAFUTH), pleaded guilty to one count of racketeering conspiracy, two counts of wire fraud conspiracy, and one count of conspiracy to obstruct justice in connection with his receipt of bribes in exchange for the awarding of contracts for the media and marketing rights to CONCACAF tournaments and FIFA World Cup qualifier matches.  Hawit, who served in high-ranking positions in soccer from 1998 to 2015, also agreed to forfeit $950,000.  At sentencing, Hawit faces a maximum sentence of 20 years for each count.  Today’s plea proceeding took place before United States District Judge Raymond J. Dearie.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego G. Rodriguez, Assistant Director in Charge, FBI, New York Field Office; and Acting Special Agent in Charge Anthony J. Orlando, IRS Criminal Investigation, Los Angeles Field Office.

According to court filings and facts presented during the plea proceeding, in approximately 2011 and 2012, Hawit negotiated and accepted hundreds of thousands of dollars in bribes in exchange for his agreement to exercise his influence as acting president of CONCACAF to award an Argentine sports marketing company the media and marketing rights to CONCACAF tournaments, including the Gold Cup and the CONCACAF Champions League.  Starting in approximately 2008, Hawit also negotiated and accepted hundreds of thousands of dollars in bribes in exchange for his agreement to exercise his influence as the FENAFUTH general secretary to award contracts to Media World, a Florida sports marketing company, for the media and marketing rights to the Honduran national soccer team’s home World Cup qualifier matches for the 2014, 2018, and 2022 editions of the World Cup.  Over a period of years, Media World transmitted these bribes from its U.S. bank accounts, through an intermediary, to foreign bank accounts controlled by the defendant’s family members and by a co-conspirator.  In addition, after the original indictment in this case was unsealed on May 27, 2015, Hawit engaged in a conspiracy to obstruct justice, and to tamper with witnesses and evidence, by advising a co-conspirator to create sham contracts in order to mask bribe payments already paid and, if asked, deceive law enforcement officers about the true nature and purpose of bribe payments.

The guilty plea announced today is part of an investigation into corruption in international soccer being led by the U.S. Attorney’s Office for the Eastern District of New York, the FBI New York Field Office, and the IRS-CI Los Angeles Field Office.  The prosecutors in Brooklyn are receiving considerable assistance from attorneys in various parts of the Justice Department’s Criminal Division in Washington, D.C., including the Office of International Affairs, the Organized Crime and Gang Section, the Asset Forfeiture and Money Laundering Section, and the Fraud Section, as well as from INTERPOL Washington. 

Assistant U.S. Attorneys Evan M. Norris, Amanda Hector, Paul Tuchmann, Nadia Shihata, Keith D. Edelman, and Brian D. Morris of the Eastern District of New York are in charge of today’s prosecution.

The government’s investigation is ongoing.

The Defendant:

ALFREDO HAWIT
Age:  64
Nationality:  Honduras

E.D.N.Y. Docket No. 15 CR 252 (S-1)

Following four weeks of trial, a federal jury in Central Islip, NY, returned a guilty verdict today against Raphael Osborne, also known as “Gusto,” a Crips street gang leader from Roosevelt, NY, on twenty-one counts including racketeering, conspiracy, robbery, attempted murder, witness retaliation, assault with a dangerous weapon, drug conspiracy and brandishing and discharging firearms during the commission of these offenses.     Osborne faces a minimum of 115 years and up to life imprisonment as a result of these convictions.

The verdict was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); Madeline Singas, Nassau County District Attorney; and Thomas C. Krumpter, Acting Nassau County Police Commissioner.

At trial, the government successfully proved that Osborne led the Roosevelt, NY-based Rollin’ 60s Crips, a racketeering enterprise that engaged in multiple crimes of violence and narcotics trafficking.  Between 2003 and 2013, members of the gang followed an “on sight” rule established by Osborne that commanded gang members to attack rival Bloods in Roosevelt whenever possible and by whatever means available.  In addition, numerous other shootings and murders were committed at Osborne’s direction.  During the trial, the government elicited details of 15 shootings and three homicides that were committed by members of the Rollin’ 60s during Osborne’s reign and established that the gang financed its activities through firearms and narcotics trafficking.  Over the course of the conspiracy, the gang was responsible for bringing hundreds of illegal firearms to Long Island, including revolvers, semi-automatic handguns, assault rifles, and submachine guns.

Among other crimes, Osborne was convicted of:

Conspiring to murder and attempted murder of a federal informant in October 2012.  Beginning in the spring of 2012, law enforcement, with the aid of a Rollin’ 60s gang member informant, began purchasing firearms from the gang, including some from Osborne’s residence on Debevoise Avenue in Roosevelt.  After the informant attempted to purchase a firearm from Osborne in June 2012, Osborne became suspicious and ordered other gang members to kill him.  On October 13, 2012, a gang member lured the informant from his Hempstead home to a location where a fellow gang member was waiting.  The informant was shot five times at close range, leaving him paralyzed.

The January 2013 attempted murder and assault of a rival Bloods gang member.  On January 30, 2013, Osborne and other ranking members of the Rollin’ 60s followed a vehicle occupied by several Bloods gang members to a house on Pleasant Avenue in Roosevelt.  As the rivals’ vehicle turned into the driveway of the residence, Osborne and other gang members unleashed a barrage of .40 and .45 caliber bullets that ripped through the vehicle and sent one of the Bloods members to the hospital with a gunshot wound to his abdomen.

Two robberies that he committed with other members of the gang in the fall of 2010.  The first robbery involved a gang member stealing marijuana and cash from the victim, while Osborne dragged the victim from his vehicle and pistol whipped him in the street.  In the second robbery, Osborne directed gang members to the home of a drug dealer who was robbed at gunpoint.

Conspiring to distribute 280 grams of crack cocaine, 100 grams of heroin, 100 kilograms of marijuana, and quantities of methylone, commonly known as “molly.” 

“The crimes that Osborne stands convicted of underscore the wanton violence the Crips street gang unleashed on neighborhoods of Long Island,” stated United States Attorney Capers.  “Street gangs such as the Crips infect communities, and we will continue to respond to the Crips’ brutal violence with unwavering investigation and prosecution – they will be brought to justice and prosecuted to the fullest extent of the law.”  Mr. Capers extended his grateful appreciation to each of the law enforcement agencies for their assistance in this case, in particular the Special Investigations Squad of the Nassau County Police Department and the FBI’s Long Island Gang Task Force.

Assistant Director-in-Charge Rodriguez stated, “The verdict against Raphael Osborne leaves the area of Roosevelt a little safer today.  During his time as a Crips leader, Osborne directed attacks against rival gangs in the Roosevelt area by any means available.  The FBI will continue to work with our law enforcement partners to dismantle gangs and the violence they bring to our communities.”

District Attorney Singas stated, “This defendant and his fellow gang members brought illegal guns, deadly drugs, and unbridled violence into communities on Long Island.  He oversaw a ruthless enterprise that trafficked in assault weapons, handguns, cocaine, and heroin, and left many victims in its wake.  I thank all of our partners who took part in the dangerous and important work to arrest and prosecute this defendant and his associates.”

Acting NCPD Police Commissioner Krumpter stated, “Crime has no boundaries and this case is an example of how partners in law enforcement utilized talented personnel and resources to bring this defendant to justice.  Today’s arrest should serve as a deterrent to criminals as we at the Nassau County Police Department are committed to working with our fellow law enforcement partners to ensure public safety.”

Upon sentencing the defendant Osborne faces a potential sentence of up to life imprisonment.

Osborne is the fourteenth member of the gang to be convicted since the inception of this case.  Three other members of the gang are pending trial.

The government’s case was prosecuted by Assistant United States Attorneys Nicole Boeckmann, Christopher Caffarone, and Special Assistant United States Attorney Michael Maffei.

The Defendant:

Raphael Osborne (a/k/a Gusto)
Age: 30

E.D.N.Y. Docket No. 14-264 (JS)

Earlier today, Gennaro “Jerry” Bruno, an associate of the Gambino organized crime family of La Cosa Nostra (the “Gambino crime family”) pleaded guilty at the federal courthouse in Brooklyn, NY, to racketeering and admitted to murdering Martin Bosshart on January 2, 2002 and conspiring to prevent testimony in a grand jury investigation into the Bosshart murder.  Today’s plea took place before United States District Judge William F. Kuntz, II, who accepted Bruno’s plea.  Pursuant to Bruno’s plea agreement with the government, Bruno will be sentenced to 21 years in prison.  Sentencing is scheduled for May 6, 2016.

The plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York, and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).  For their outstanding investigative work and assistance in this case, Mr. Capers extended his grateful appreciation to the FBI, the New York City Police Department, the Queens County District Attorney, and the U.S. Attorney’s Office for the Southern District of New York.

According to court filings and facts presented during the plea proceeding, Bruno became an associate in the Corozzo Faction of the Gambino crime family by approximately 2000, after proving himself over a number of years as a member of a violent gang called the “Young Guns.”  Over the next 14 years, Bruno engaged in numerous crimes with and on behalf of a faction of the Gambino crime family aligned with Joseph “JoJo” Corozzo, a powerful Gambino member who had risen to become the consigliere of the family.  Bruno and other Gambino crime family members and associates moved large quantities of high-potency marijuana from Canada into the New York City area.  In 2001, Bruno’s criminal associate Martin Bosshart began making efforts to exclude one of Bruno’s coconspirators from the marijuana importation operation.  In an effort to prevent Bosshart from doing so, Bruno plotted with other Gambino crime family members and associates to murder Bosshart.  On the night of January 2, 2002, Bruno lured Bosshart to an isolated location in Queens, NY.  There, Bruno shot Bosshart in the back of the head at point-blank range, killing him immediately.  The body of Martin Bosshart, who was 30 years old at the time, was recovered at the scene.

Thereafter, Bruno evaded justice for years and conspired with other Gambino associates to obstruct an official grand jury investigation into the Bosshart murder, all the while continuing to participate in the core money-making activities of the Gambino crime family, including drug trafficking and extortion.  As part of the alleged pattern of racketeering, Bruno, among other things, used his position in the Gambino crime family to extract extortionate payments from the owner of a waste carting company in Queens, NY.  Bruno was arrested in Las Vegas on October 28, 2014, and removed to the Eastern District of New York to face the charges against him.

The government’s case is being prosecuted by Assistant United States Attorneys M. Kristin Mace, Nadia Shihata, and Mathew Miller.

The Defendant:

GENNARO BRUNO, a/k/a “Jerry”
Age: 43
Las Vegas, Nevada

E.D.N.Y. Docket No. 14-CR-556 (WFK)

This afternoon, Robert L. Capers, United States Attorney for the Eastern District of New York, will host a repatriation ceremony at which the United States will return to Mongolia the fossilized remains of six species of dinosaur.  The fossils were unlawfully removed from Mongolia and seized by U.S. Immigration and Customs Enforcement (ICE) agents in New York and Utah. 

The largest of these fossils, an Alioramus skull, was forfeited to the United States as a result of a civil forfeiture action handled by the U.S. Attorney’s Office.  The other fossils being returned at today’s ceremony were administratively forfeited by ICE and U.S. Customs and Border Protection (CBP).   HSI Executive Associate Director of Homeland Security Investigations (HSI) Peter T. Edge and Mongolia’s Ambassador to the United States Altangerel Bulgaa will sign the ceremonial certificates transferring ownership of the fossils from the United States to Mongolia.  Mongolian paleontologist Dr. Bolortsetseg Minjin, and Director of the Institute for the Study of Mongolian Dinosaurs, will participate in the ceremony as a representative of the Mongolian Ministry of Education, Culture and Sciences.

“Mongolia is home to the world’s largest reserve of dinosaur fossils with many discoveries waiting to be made,” stated U.S. Attorney Capers.  “We are proud of our role in restoring this rich paleontological heritage to the Mongolian people and taking these cultural treasures from the hands of looters and smugglers. We stand beside the people of Mongolia by disrupting the international trade in smuggled fossils and returning them to their home where they will be studied and treasured.”

“Today’s ceremony is an excellent demonstration of the cooperation between HSI, our colleagues at the Department of Justice, and our foreign counterparts with the Government of Mongolia,” stated HSI Executive Associate Director Edge.  “A successful repatriation requires extensive cooperation among all parties involved, which is rewarded by the knowledge that we’ve returned what rightfully belongs to the people of Mongolia.”

“CBP is extremely proud to have played an important role in returning these valuable national treasures to the people of Mongolia,” said Robert E. Perez, Director of CBP’s New York Field Operations. “CBP’s cooperation with HSI and the United States Attorney’s Office for Eastern District of New York demonstrates the continuing resolve of law enforcement in the United States to address illegal trafficking in stolen artifacts.”

“Three years ago, we celebrated our first repatriation ceremony of the skeleton of a Tarbosaur-Bataar.  The T-Bataar case was a unique one in many aspects.  Most importantly, it has laid foundation of further strong and fruitful cooperation between our two governments in the fight against illegal trade of cultural heritages including fossils.  Thanks to this fruitful cooperation, 23 dinosaur fossils were repatriated to Mongolia during the last three years and now we are witnessing a repatriation of seven fossils including an Alioramus skull,” stated Ambassador Altangerel.  “I take this opportunity, on behalf of the Government and people of Mongolia, to express our profound gratitude for the hard work and dedication of American law enforcement agencies.  I have no doubt that these efforts will further strengthen of our bilateral ties, opening new opportunities and giving new impetus to our future cooperation.”

The Mongolian dinosaur fossils being returned at today’s repatriation ceremony include:

• Alioramus skull
• Bactrosaurus skeleton
• Protoceratops baby skeleton pieces
• Troodontid egg bed
• Psittacosaurus skeleton and skull
• Hadrosaurus skeleton pieces

The Alioramus was a dinosaur that lived in the late Cretaceous period, approximately 65 to 70 million years ago.  It is related to the Tyrannosaurus and Tarbosaurus.  The Alioramus skull was seized by CBP after being shipped from France with false declarations which suggested that it was an inexpensive replica, not a genuine fossil.  When the shipper petitioned for the Alioramus skull’s release, it conceded that it was a genuine Mongolian fossil but submitted forged Mongolian export documents.  Mongolian patrimony laws prohibit the export and foreign ownership of dinosaur fossils.

According to Dr. Bolortsetseg Minjin, the Alioramus is an extremely rare dinosaur; only two specimens have been reported in the scientific literature, and both are from Mongolia.  The Alioramus fossil being returned today is the most complete skull discovered to date.  Its relative completeness, color and overall state of preservation are typical of the Nemegt Formation, which is only exposed in the Gobi Desert of Mongolia.  In 2014, Mongolia nominated the Nemegt Formation and other fossil sites in the Gobi Desert for inclusion in the World Heritage List, citing the sites’ distinction as the largest dinosaur fossil reservoir in the world.

The government’s civil forfeiture action against the Alioramus skull was handled by Assistant United States Attorney Karin Orenstein.

E.D.N.Y. Docket No. 14-CV-5198 (BMC)

Earlier today in Brooklyn federal court, Muzaffar Nadeem, the owner of SM&B Construction Co., Inc. (SM&B), was sentenced to 96 months’ imprisonment, ordered to pay more than $1.3 million in restitution to the IRS, and ordered to forfeit to the government over $7.1 million in criminal proceeds, following his convictions on May 8, 2015, after a four-week jury trial, for mail and wire fraud, structuring financial transactions, federal programs bribery, making illegal cash payments to a union official, money laundering, unlawful monetary transactions over $10,000, subscribing to false tax returns, and multiple related conspiracy charges. 

The convictions arose out of Nadeem’s leadership role in a long-running scheme to pay SM&B’s workers a fraction of the prevailing wage on projects funded by the New York City School Construction Authority (SCA), as SM&B was legally and contractually required to do.  Nadeem’s co-conspirators Zainul Syed, Afzaal Chaudry and Irfan Muzaffar were also convicted at trial of various crimes for their participation in this scheme.  Muzaffar was previously sentenced to 18 months’ imprisonment, and Chaudry was previously sentenced time served, following approximately ten months of imprisonment.  Syed is awaiting sentencing.  The sentencing proceedings were held before U.S. District Judge Brian M. Cogan. 

The sentence was announced by Robert L. Capers, United States Attorney for the Eastern District of New York; Shantelle P. Kitchen, Special-Agent-in-Charge, Internal Revenue Service, Criminal Investigation, New York; and Jonathan Mellone, Acting Special Agent-in-Charge, U.S. Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations.  

“Contractors who perform public works in New York City and New York State are on notice that if they line their pockets by cheating workers out of the wages to which they are entitled will be vigorously prosecuted,” stated United States Attorney Capers.  Mr. Capers expressed his grateful appreciation to the Office of the New York State Attorney General and that office’s Organized Crime Task Force, the New York City Department of Investigation, the New York City School Construction Authority, Office of Inspector General, the New York City Police Department, and the New York County District Attorney’s Office for their assistance in the investigation and prosecution of the defendant.

IRS Special Agent-in-Charge Kitchen stated, “The conviction of Mr. Nadeem and his co-conspirators and now, the sentencing of Mr. Nadeem, will hopefully give the hard working individuals who were defrauded in this multi-million dollar scheme a feeling that justice has been served.  Additionally, this investigation should send a reassuring message to the taxpayers, who ultimately fund School Construction Authority projects, that law enforcement will investigate and prosecute such frauds, as well as send a message of deterrence to anyone contemplating taking advantage of public works projects.”

DOL-OIG Special Agent-in-Charge Mellone stated, “Today’s sentencing underscores the Office of Inspector General’s continued commitment to bring to justice those who would bribe Union officials and falsify payroll records to cheat the American worker out of the required prevailing wage to which they are entitled.”

Nadeem owned and operated SM&B, which received over $36 million in fraud-induced payments from the SCA since 2007.  Evidence at trial established that SM&B paid workers, including bricklayers and laborers, cash wages on its projects at rates that were a small fraction of the prevailing wage.  The defendant and his co-conspirators Syed and Chaudry then falsely certified to the SCA that the workers had been paid the prevailing wage. 

To conceal the scheme, and to obtain cash to pay the illegally low wages to workers, Nadeem, Syed and Muzaffar illegally structured financial transactions, cashing hundreds of checks in amounts less than $10,000 for the purpose of avoiding federal reporting requirements.  Since July 2006, Nadeem and others acting his direction wrote more than $4.1 million in structured checks on SM&B’s account. 

Nadeem and Syed arranged for the payment of $30,000 in cash bribes to an undercover SCA Inspector, and over $7,000 in cash bribes to Russell Argila, a shop steward for Local 1 of Bricklayers.  Argila previously pleaded guilty to accepting those bribes.  Nadeem also laundered approximately $7 million in proceeds of the scheme by funneling it through shell companies, and sent millions of dollars through these shell companies to Pakistan to invest in an amusement park and resort complex named “Wayzgoose Park.” 

Finally, Nadeem filed false tax returns for SM&B and himself that fraudulently inflated SM&B’s business expenses and reduced its profits by more than $4 million. 

The government’s case is being prosecuted by the Office’s Public Integrity Section.  Assistant United States Attorneys Lan Nguyen, Gina M. Parlovecchio and Nathan Reilly are in charge of the prosecution.  Assistant United States Attorney Claire Kedeshian is handling the forfeiture aspects of the case. 

The Defendant:

MUZAFFAR NADEEM
Age: 60
Brooklyn, New York

E.D.N.Y. Docket No. 13-CR-424 (BMC)

Walsh Falsely Represented that He Worked Regular and Overtime Hours for the Suffolk County Sheriff’s Office When He Was Playing Golf, Visiting Casinos, or
Performing Work on Behalf of the Suffolk County Conservative Party

Late this afternoon, following three weeks of trial, a federal jury in Central Islip, returned a guilty verdict against Suffolk County Conservative Party Chairman Edward M. Walsh, Jr., on charges that he engaged in a scheme to steal wages for regular and overtime hours in connection with his employment with the Suffolk County Sheriff’s Office (SCSO).  The jury convicted the defendant of both counts of an indictment charging him with theft of government funds and wire fraud, in violation of Title 18 U.S.C. §§ 666 and 1343, respectively.   

The verdict was announced by Robert L. Capers, United States Attorney for the Eastern District of New York and Diego Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI).

At trial, the government successfully proved that from January 2011 to April 2014, Walsh, a SCSO Correction Officer III Investigator, falsely represented to the SCSO that he had worked certain regular and overtime hours when, in fact, he did not work those hours.  Contrary to his representations, the government successfully established that Walsh was, among other things, playing golf, gambling at Foxwoods Casino, or performing work on behalf of the Suffolk County Conservative Party.  In reliance on Walsh’s false representations, the SCSO paid Walsh wages for hours he did not work.  At trial, investigators estimated that Walsh was paid more than $200,000 for regular and overtime hours he did not work. 

“Today’s verdict once again establishes that no one person is above the law.  Edward Walsh abused his position and authority as a political boss to steal from taxpayers in order to fund his personal and political activities.  Now he will be held accountable for his actions,” stated United States Attorney Capers.  “We and our partners in the FBI will continue to root out government corruption and fraud wherever we find it.” 

Assistant Director-in-Charge Rodriguez stated, “Defrauding the government never pays as Mr. Walsh found out today with the guilty verdict.  Mr. Walsh cheated Suffolk County and ultimately the tax payers for hours never worked.  The FBI remains committed to working with our law enforcement partners to root out fraud to the government in any form.”

Upon sentencing the defendant Walsh faces a potential sentence of up to 30 years at the time of sentence.

The government’s case was prosecuted by Assistant United States Attorneys Catherine M. Mirabile and Raymond A. Tierney

The Defendant:

Edward M. Walsh, JR.
Age:  50
East Islip, New York

E.D.N.Y. Docket No. 15-CR-091(ADS)

 

A joint raid conducted by the Federal Bureau of Investigation and Drug Enforcement Administration’s New York Drug Enforcement Task Force last night resulted in the discovery of a manufacturing facility and the seizure of at least 200 kilograms of synthetic cannabinoids, commonly sold on the street under the brand names “K2” or “Spice,” from a storefront in Queens, New York.  One defendant, Osvaldo Maria Vasquez, was arrested at the site in connection with a previously-issued arrest warrant charging him with participating in a conspiracy to distribute cocaine in 2014 and 2015. 

The seizure and arrest were announced by Robert L. Capers, United States Attorney for the Eastern District of New York, Diego G. Rodriguez, Assistant Director-in-Charge, Federal Bureau of Investigation (FBI), New York Field Office, James J. Hunt, Special Agent-in-Charge, Drug Enforcement Administration (DEA), Commissioner William J. Bratton, New York City Police Department (NYPD) and Joseph A. D’Amico, New York State Police Superintendent. 

According to the detention memorandum, a search warrant was executed last night at “Excellent Tire Shop Services,” a business in Queens Village that purported to sell tires.  Upon entry into the premises, the agents located approximately 170 kilograms of suspected synthetic cannabinoids already packaged for immediate sale to customers.  Concealed behind a tarp in the rear of the premises was a narcotics manufacturing facility, where agents found industrial quantities of the chemicals used to manufacture synthetic cannabinoids, scales, packaging materials, flavoring agents, as well as a large amount of processed cannabinoids that were not yet packaged for sale.  In total, at least 200 kilograms of suspected synthetic cannabinoids were seized from the location.  Law enforcement estimates this quantity of synthetic cannabinoids to have a street value of at least $200,000. 

“Synthetic cannabinoids present a new danger to public health.  While sometimes called synthetic marijuana, use of these drugs can have unpredictably severe and even lethal effects,” stated United States Attorney Robert L. Capers.  “Last night’s seizure by the FBI and DEA represents another step in law enforcement’s response to this deadly serious problem.” 

FBI Assistant Director in Charge Diego Rodriguez said “the production of synthetic drugs creates serious concerns for the law enforcement community and poses a significant public safety risk for consumers of these volatile and potentially deadly substances. As we confront an epidemic in which society is saturated with the dissemination of many illegal substances, we stand with our partners in confronting this emerging challenge."

DEA Special Agent in Charge James J. Hunt said “rearing its ugly head, synthetic cannabinoids were being manufactured and packaged with intentions to be unleashed in our city.  Due to good police work, a clandestine K2 lab was dismantled in Queens, demolishing the health and the societal dangers caused by K2 use along with it.”  

“This makeshift synthetic cannabinoid lab, which operated out of sight in the rear of a tire shop, was used to produce this poison in the vicinity of several homes and businesses,” said Police Commissioner William J. Bratton.  “I commend the work of the Drug Enforcement Task Force and our FBI partners for seizing this drug before it reached the streets of New York.”

Joseph A. D’Amico, New York State Police Superintendent said “the dangers of synthetic narcotics are well documented, with very serious health and public safety issues that have occurred because of the increase in use. With this bust, we have succeeded in taking a large quantity of synthetic drugs off the streets, and shutting down the lab where they were produced. The State Police is committed to working with our law enforcement partners to keep these hazardous substances out of our communities.”

The defendant was arraigned this afternoon before United States Magistrate Judge Cheryl L. Pollak at the federal courthouse in Brooklyn.  The charges in the complaint are merely allegations, and the defendant is presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by the Office’s International Narcotics and Money Laundering Section.  Assistant United States Attorneys Lauren Howard Elbert and Jennifer Sasso Carapiet are in charge of the prosecution. 

The Defendant:

OSVALDO MARIA VASQUEZ
Age:  36
Queens, New York

E.D.N.Y. Docket No. 16 MJ 256

Earlier today, John Capuano, a New York City school guidance counselor and teacher’s union representative, pled guilty at the federal courthouse in Central Islip, New York, to Transportation of Child Pornography in Interstate and Foreign Commerce.  Today’s plea proceeding took place before United States Magistrate Judge Gary R. Brown.  At sentencing, Capuano faces a mandatory minimum sentence of five years in prison and a maximum of 20 years.

The guilty plea was announced by Robert L. Capers, United States Attorney for the Eastern District of New York.

“Protecting the vulnerable, particularly children, is a priority for law enforcement and this Office,” stated United States Attorney Capers.  “This crime was particularly egregious in that Capuano was a school guidance counselor entrusted with ensuring the safety and wellbeing of children while he at the same time was victimizing them by distributing images of child pornography.”  Mr. Capers thanked the Department of Homeland Security, Homeland Security Investigations (HSI), for its assistance in the investigation.

As set forth in the charging instruments and the defendant’s plea allocution, in April 2015, an undercover HSI agent, as part of an ongoing effort to locate individuals sharing child pornography, found child pornography images and videos involving children as young as 3-5 years’ old which had been posted by Capuano to a chat room in a publicly available Internet application.  After tracing location information for the account used to post the images, law enforcement obtained a search warrant and executed on May 28, 2015, at Capuano’s residence  in Valley Stream, New York.

During the search, Capuano spoke with law enforcement personnel following a waiver of his Miranda rights and admitted that he used the Internet application to trade child pornography and posted the images located by the undercover agent.  Capuano also identified his personal telephone and his work telephone as a teacher’s union representative as devices he used to access these materials.  Capuano was arrested and remains incarcerated.

This prosecution is part of Project Safe Childhood, a nationwide initiative launched in May 2006 by the Department of Justice to combat the growing epidemic of child sexual exploitation and abuse.  Led by United States Attorneys’ Offices, Project Safe Childhood marshals federal, state, and local resources to better locate, apprehend, and prosecute individuals who exploit children via the Internet, as well as to identify and rescue victims.  For more information about Project Safe Childhood, please visit www.projectsafechildhood.gov.

The government’s case is being handled by the Office’s Long Island Criminal Division.  Assistant United States Attorney Allen Bode is in charge of the prosecution. 

The Defendant:

John Capuano
Age:  43
Valley Stream, New York                                        

E.D.N.Y. Docket No. 15 CR 312 (DRH)